VIEWS: 7 PAGES: 20 POSTED ON: 7/15/2011
Workers’ Compensation: Insurance Matt Pearson Legal Presentation MGMT 610 March 10, 2003 Agenda • Review of the Components of the Workers’ Compensation Process • Common Questions • Case Example • How does this apply to us? The W.C. Process Compensation coverage Complex and a Insurance Constantly Changing Medical Treatment Payments Process Disability Death benefits The injury An Individual need’s a Penalties good understanding of the Liens following to be an expert Tort laws on the subject Damage suits- subrogation Appeals Vocational rehabilitation Q. Do I need to have workers' compensation insurance? • A. California law requires employers to have workers' compensation insurance. Even out-of-state employers may need workers' compensation coverage if an employee is regularly employed in California or a contract of employment is entered into here. Q. Where do I get workers' compensation insurance? • A. You can get workers' compensation insurance coverage from any of the more than 300 private licensed insurers authorized to sell such policies in California. While you can purchase the policy directly from an insurer, most policies are sold through an insurance agent or broker. • The largest workers' compensation carrier is State Compensation Insurance Fund (State Fund). If you can't find an insurer willing to cover your business, State Fund is required to provide you with coverage. • If you belong to a trade association you might want to check with them first - some trade groups negotiate special rates for their members. Your local chamber of commerce may also be a source of good advice. Q. What about self insurance? • A. Some employers, mainly large businesses, self insure for workers' compensation. Self insurance requires state approval, a net worth of at least $5 million, net income of $500,000 per year and posting a security deposit. • The self insured employer has the option of administering their own workers' compensation claims or contracting with a third party administrator (TPA) to provide these services. • Office of Self Insurance Plans Q. How much does workers' compensation insurance cost? • A. Workers' compensation insurance premium rates were deregulated several years ago. They may now vary from carrier to carrier. Shop around for a carrier that best meets your needs. Cost is one consideration, but there are other factors you should look at: the services they provide, how convenient will it be to work with them how familiar they are with your industry, etc. If you have a broker or agent, check with that person. Q. What determines the employer’s rate for premium? • A. A number of factors that determine the annual premium that your insurance carrier will charge. These include: your industry classification; your company's past history of work related injuries (known as your experience modification), your payroll; any special underwriting adjustments, such as use of a certified Health Care Organization; and any special group or dividend programs that you may be eligible for. Q. What happens if I’m caught uninsured between carriers and an employee is injured? • A. An employer's failure to have workers' compensation coverage is a criminal offense. Section 3700.5 of the California Labor Code specifies that it is a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail for up to one year, or both. Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers. • If your insurance coverage lapsed and an employee was injured on the job, you are responsible for ensuring that all claims related bills are paid. Contact the information and assistance officer at the local DWC district office for further information. You may also contact the Uninsured Employers' Fund. Q. What are my posting requirements? • A. Employers must post a notice of compensation carrier poster in a conspicuous place at the work site. This poster provides employees information on the company's workers' compensation coverage and where to get medical care for work injuries. Specific requirements are contained in sections 3550-3553 of the California Labor Code. Failure to post this notice is a misdemeanor that can result in a civil penalty of up to $7,000 per violation. Contact your insurer to get the posting notice and the required information that must be included on it. Q. Can I be fined for not carrying workers' compensation insurance? (1/3) A. Yes. If the Division of Labor Standards Enforcement (State Labor Commissioner) determines that an employer has failed to secure workers' compensation coverage, a stop order will be issued and served (Labor Code Section 3710.1). This order prohibits the use of employee labor until the coverage is obtained, and failure to observe it is a misdemeanor punishable by imprisonment in the county jail for up to 60 days or by a fine of up to $10,000, or both. (Labor Code Section 3710.2). The Division of Labor Standards Enforcement will also assess a penalty of $1,000 per employee employed at the time the stop order is issued and served. (Labor Code section 3722(a)). Q. Can I be fined for not carrying workers' compensation insurance? (2/3) • In addition, if an injured worker files a workers' compensation claim that goes before the WCAB, and the workers' compensation judge finds that the employer had not secured insurance as required by law, then, when the adjudication becomes final, the uninsured employer may be assessed a penalty of $10,000 per employee employed at the time of injury if the worker's case was found to be compensable, or $2,000 per employee employed at the time of injury if the worker's case was noncompensable, up to a maximum of $100,000 [Labor Code section 3722(b)]. Q. Can I be fined for not carrying workers' compensation insurance? (3/3) • Finally,failure to secure workers' compensation insurance when you knew, or reasonably should have known, that it is required, is a misdemeanor "punishable by imprisonment in the county jail for up to one year, or by a fine of up to ten thousand dollars ($10,000) or by both that imprisonment and fine." (Labor Code Section 3700.5) Q. Can my employees contribute for workers' compensation insurance? A. No. Workers' compensation insurance is part of the cost of doing business. An employer cannot ask employees to help pay for the insurance premium. Employer's Guide to Workers' Compensation in California • DWC has published an easy to read Employer's Guide to Workers' Compensation in California. • A link to download a copy in Adobe Acrobat (.pdf) format can be found here Case Example: TUOLUMNE COUNTY MAN ARRESTED FOR WORKERS’ COMPENSATION FRAUD • Jeffrey Ferguson was employed as a licensed vocational nurse at Tuolumne County Hospital from August of 1994 through April of 1995. • Submitted four workers’ compensation claims for injuries to his wrists, back and right heel. Case Example: TUOLUMNE COUNTY MAN ARRESTED FOR WORKERS’ COMPENSATION FRAUD • In June of 1998, Ferguson attended the 49th Tuolumne Lumber Jubilee and competed in a tug-of-war contest. • The 43 minute contest was captured on videotape and revealed that Ferguson was engaged in physical activities that were contrary to his subjective claims. Case Example: TUOLUMNE COUNTY MAN ARRESTED FOR WORKERS’ COMPENSATION FRAUD • Tuolumne County incurred losses of over $75,000 due to his fraudulent claims. • Ferguson could face up to five years in state prison and/or pay a fine up to $50,000. Application to us? • EVERYONE need WC insurance • Make sure you are in compliance with the insurance regulations • If in doubt, consult with a labor attorney • Always watch out for fraudulent claims • Stay current with the law Questions / Comments?
"Workers Compensation Insurance"