CM 333: Quiz 1 (Ch. 2) Worker Compensation and Injured Worker Management

Modified Premiums

(base premium)(EMR)

A good accident prevention program

- SSSP - identify all project hazards - strategies of mitigating hazards

What are four strategies for reducing workers' compensation costs?

- getting them back on the work place as soon as medically possible, in any capacity - thorough investigation - have a good APP - retain good contact with injured employees

Cost Reduction Strategies

- have a good accident prevention program - stay in contact with all injured employees - have a good return-to-work program and use it --> the sooner an injured worker returns to work, the lower the claim will be. Get the worker back to work, even in a limited manner ASAP - conduct thorough investigations of any accidents

What are the four major provisions of workers' compensation statutes?

- income replacement - rehabilitation - accident prevention - cost allocation

Provisions in Workplace compensation

- income replacement (pay salary until recovery) - rehabilitation (pay medical costs) - accident prevention (incentive for investment in accident prevention) - cost allocation (more funds in more hazardous construction activities) - Temp disability benefits - retraining

What are the three types of workers' compensation insurance?

- medical-only pays cash benefits for lost work/pay medical bills - Temporary disability: monetary payouts for employees who are unable to perform job, reassignment - Permanent disability: monetary payouts, + vocational training for appropriate job classification

Premiums based on

- occupational classifications of workers - record of injury frequency and benefit payments

Return-to-Work Strategy

- recuperation - physical therapy - shorter work hours - alternative work assignments-- transitional jobs Promotes communication, healthy for worker

Impacts of a good return-to-work strategy

- reduces productivity, cost of training replacements, risk of reinjury - healthy for injured employee-- keeps them active, job security, maintain contact w co-workers

State Workers' Compensation Requirements

- require employer insurance, or capacity to carry risk - may offer state funds, or private insurance coverage is offered Benefits awarded based on - policy of pay duration for permanent disability (allotted time, until retirement, until death) - Schedule for compensating permanent impairment on body parts - Severity of impairment/capacity of worker to compete

Why were workers' compensation laws established by the individual states?

- separate program covers federal civilian workers Vary in terms of who is allowed to provide insurance, which injuries and illnesses are compensable, and the level of benefits

What are four types of injuries that are compensable in workers' compensation insurance

- temporary partial disability - temporary total disability - permanent partial disability - permanent total disability

Premiums for State Funds

Annual premium established at the beginning of the year. If claims costs > premium, GC must pay extra. If claims costs < premium, GC is refunded.

How are benefits determined?

Benefits awarded based on - policy of pay duration for permanent disability (allotted time, until retirement, until death) - Schedule for compensating permanent impairment on body parts - Severity of impairment/capacity of worker to compete

What is the experience modification ratio, and how is it determined?

EMR is a ratio calculated from based on aggregated claims costs of a company and overall average claims cost of all companies. It is used to adjust insurance payouts and incentivizes good safety policies and good track records.

Experience Modification Ratio

EMR= (aggregate company claims cost over 3-yr period)/(average claims cost for ALL companies over 3 yr) Premium modifier - Companies with no claims history are assigned an EMR of 1.0 Good Safety Records, less than average claims of all companies <1.0 --- incentive to promote safe practices

Why was Workers' Compensation developed?

Eliminate the need for workers to go to court to obtain compensation for injuries incurred in the work place. Too costly and time-consuming. Minimize need for legal action to resolve workplace disputes.

Third-Party Lawsuit

Employee cannot sue employer. BUT, employee of subcontractor/supplier can sue general contractor. e.g. if the GC allowed unsafe conditions

No-Fault Insurance

Employer cannot deny a claim by an insured employee on the basis that the employee was negligent in causing the injury. Employee cannot sue employer.

Temporary Partial Disability

Injured worker is capable of light/part-time duties and is expected to recover fully. e.g. broken toe in office job

Temporary Total Disability

Injured worker is incapable of any work for any period of time but is expected to recover fully with no permanent disability. MOST COMMON e.g. broken bone requiring surgery Often paid 2/3rds of wages during period of disability

Permanent Total Disability

Injured worker is not expected to recover and is unable to work in any job classification 2/3rds of wages for set period, retirement, or life If death, benefits paid to spouse/children

Permanent Partial Disability

Injured worker is not expected to recover fully but will be able to work again. e.g. loss of a finger Benefits either listed in schedule, or adjusted to amount disability Given vocational training in a work classification for which they are medically qualified

Workers' Compensation Insurance Contract

Insurer agrees, for a price (premium), to assume the liability imposed on the insured GC by the state workers' compensation statute

Washington State is a

Monopolistic State fund. Employers must purchase workers' compensation insurance from a state fund, unless they are allowed to self-insure.

Private Insurance Carriers

Primary source of workers' compensation insurance

Why are the base rates for roofers higher than those for plumbers?

Roofers are classified as having greater safety risk on the jobsite. Therefore, their base insurance rates would be higher.

Base Premium

[(Direct Wages)(Base Rate)]/$100 applied to each $100 of direct employee compensation $/hour worked Washington calculates base premium through actual hours worked by employees in each work classification

Modified Work

adjustment or alteration to the way in which a job is normally performed in order to accommodate the employee's physical restrictions

Premium Rate

based on GC's payroll - differ for each employee work classification based on degree of risk associated with specific craft

Alternative work

different job within the company that meets the physical restriction prescribed by doctor

How is the dollar value of the construction company's workers' compensation liability determined?

modified premium (EMR*base premium)

Workers' Compensation Statutes

require employees give up the right to sue their employers for compensation resulting from injury/illness sustained in the work place. Employers must provide compensation irrespective of whether or not the employee's negligence contributed to the injury. Define dollar value of GC's liability

What are monopolistic state agencies?

requires employers to purchase workers' compensation insurance from a state fund or self-insure

Part-time work

working less than a normal work schedule because the doctor has not released the injured worker for full-time work