Chapter 8 Workers Compensation Insurance

If there is no widow or widower, any children will receive the entire benefit.

-If there is 1 child, 32%; -If there are 2 children, 42%; -If there are 3 children, 52%; -If there are 4 children, 62%; -If there are 5 children 64%; or -If there are 6 or more children 66 2/3%.

Any employer seeking to become a subscriber to the State Workers Insurance Fund must make an application, including the following:

-The nature of the business; -The average number of employees expected to be employed; -The approximate wages expected to be paid; -The place where business is transacted; -The place where the payroll and other accounts are kept; and -Any other information the board requires.

Coverage Part 3 - Other State Insurance

Automatic & temporary coverage for incident exposure in other states

Coverage Part 5 - Premium

Based on each $100 of annual payroll; right of insurer to audit insured's books

Workers compensation laws does NOT provide

Compensatory benefits.

Coverage Part 2 - Employers Liability

Coverage NOT provided under states workers comp. laws

Coverage Part 1 - Workers Comp.

Coverage for benefits required by the state's Workers Comp. Law

If an employer in a state with elective workers compensation laws chooses not to be subject to those laws, what does the employer lose?

Its common law defenses against liability suits

Which of the following terms refers to such disabilities as the loss of a limb, hearing, or eye sight?

Permanent partial disability

Crews of ships are covered by the

The Jones Act

Benefits provided by Death payments....

Usually pays for a small amount of funeral & burial expenses and weekly income benefits to surviving family (spouse or children)

Premium Discounts

applies when an insured owes a total standard premium greater than $5,000.

The actual benefits provided are not included,

only a reference to the individual state's law.

Workers compensation rating is developed by applying a

rating bureau job classification rate to each $100 of payroll.

The other insurance clause states

that losses will be paid on a contribution by equal shares basis.

In order to QUALIFY benefits employee business travel injury or death,

the duration of the business trip cannot be more than 1 year.

If the employee's injury or death is caused by a third party,

the employee may sue the third party.

The employee may not sue, except in cases in which,

the employer has displayed gross negligence or has assaulted the employee or where the injury has been caused through the employer's activities in some capacity other than as employer.

Agricultural associations and employers face fines of up to ______per violation

$1,000

Any operator who fails to correct a violation after a citation within the period permitted for its correction may be assessed a civil penalty of up to ____ for each day during which such failure or violation continues.

$1,000

The operator of a coal or other mine in which a violation occurs of a mandatory health or safety standard or who violates any other provision of this Act, will be assessed a civil penalty up to ______ for each such violation.

$10,000

Courts may assess fines of up to ______and prison terms of up to ___ years in criminal cases.

$10,000 ; 3

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll.

The Department of Labor and Industry maintains A Subsequent injury fund of...

$100,000 by assessing each Workers Compensation insurer a proportion of the amount spent by the fund during the preceding year.

When self-insuring, employers must deposit a bond or security. These employers must annually renew the applicable exemption permits, and pay a renewal fee of _____

$100.

In addition to income benefits, how much will a dependent survivor receive as a funeral benefit for a deceased employee covered under Workers Compensation?

$3,000

An employer (or employer group) seeking exemption from this liability (through self-insurance) must demonstrate the financial ability to pay compensation, and must pay a fee of ....

$500

An employee that does not qualify as a Jones Act seaman

(i.e. one who works as a contract employee who moves back and forth between multiple vessels not under common ownership) will generally be covered under longshore or maritime law, and not under the Jones Act.

The Jones Act

- covers ships' crew (seamen) -for injuries that occur in navigable waters used for international or interstate commerce

Federal Employees Political Activities Act

- employers liability law (NOT workers comp. law) - interstate railroad liability for bodily injures sustained by employee - Section II of workers comp. - covers lost earnings by railroad employees - compensation for pain and. Suffering - legal action must commerce within 3 years

U.S. Longshore and Harbor Workers Compensation Act

- for persons in maritime employment (except seaman) - must meet a situs & status test -for injuries that occur in navigable water or on adjoining wharfs, piers, docks, or similar

Employers Liability Insurance Basic Limits:

-$100,000 for bodily injury per accident; -$100,000 per employee for disease; and -$500,000 policy limit for disease (for all disease claims within the policy term).

Supplemental payments also are included and are similar to those found in other types of insurance policies. They include the following:

-Defense costs; -Expenses incurred at the insurer's request; -Premiums for certain bonds; -Litigation costs; -Interest on judgments required by law until the insurer offers a settlement; and -All expenses the insurer incurs.

The following employees are not protected under Workers Compensation law:

-Domestic servants (unless the employer has elected to be subject to the law); -Licensed real estate salespersons, with a written agency agreement, and are paid only by commission, and qualify as independent contractors for federal income tax purposes; -Licensed insurance agents affiliated with a licensed insurance agency; -Elected officers of the Commonwealth or any of its subdivisions.

In general, any disease that meets the following criteria qualifies as an occupational disease:

-Exposure results from employment; -Cause is related to the industry or occupation; -Chance of contacting it is substantially greater in that industry or occupation than in the general population, with some exceptions.

If an employee dies, compensation will be paid to

-If there are no children under age 18, the widow or widower will receive the entire benefit (51% of wages —If there are any children under age 18, they will split the benefit with the widow, widower or respective guardian. -If there is no widow or widower, any children will receive the entire benefit. —If there is no widow, widower or children, the benefit (32%) will be paid to any dependent parent -If there is no widow, widower, children or dependent parent, the benefit (22%, and 5% for each additional sibling (up to a maximum of 32%)) will be paid to a dependent brother or sister

If there are any children under age 18, they will split the benefit with the widow, widower or respective guardian......

-If there is 1 child, 60%; or -If there are 2 or more children, 66 2/3%.

Coverage is provided for the employer's liability associated with bodily injury by accident or occupational disease and includes resulting death, and is triggered if:

-Injury arises from employment by the insured; -Occurs in a state or territory listed in 3.A. of the information page; -Occurs during the policy period; and -If suit is brought in the USA or its territories, possessions, or Canada.

No compensation will be paid if injury or death is one of the following:

-Intentionally self-inflicted; -Caused by employees in violation of the law including drug and alcohol use -Caused while an employee is operating a motor vehicle provided by the employer if the employee is not in the course and scope of employment at the time of injury.

There are several exclusions that apply to employers liability coverage:

-Liability assumed under a contract; -Punitive or exemplary damages; -Employees knowingly employed in violation of law; Injury intentionally caused by the insured; -Injuries that occur outside the United States

Although most state workers compensation laws restrict recovery to economic losses only, the FELAtypically allows railroad employees to recover the following types of damages:

-Lost earnings, past and future; -Medical expenses if paid out of pocket by the injured employee; -Payment for the employee's reduced ability to earn a wage because of the injuries suffered; and -Compensation for pain and suffering.

What are the 4 types of benefits provided by Workers Compensation insurance?

-Medical payments -Disability income -Rehabilitation expenses -Death benefits

Your Duties if Injury Occurs explains the insured's duties in case of an employee injury. These duties are the following:

-Notify the insurer at once; -Provide immediate medical care required by the law; -Provide the names and addresses of the injured worker and any witnesses; -Promptly send any notices or other legal papers; -Cooperate with the insurer; and -Do not make any voluntary payments or assume any obligations.

What are the 2 main parts of workers compensation insurance?

-Part I is workers compensation, -Part II is employers liability.

Agricultural associations, agricultural employers, and farm labor contractors are required to do the following:

-Pay workers the wages owed when due. -If they own property used to house migrant workers, ensure that worker housing complies with federal and state safety and health standards. -Assure that vehicles used by a farm labor contractor, agricultural employer, or agricultural association to transport workers are properly insured, are operated by licensed drivers, and meet federal and state safety standards.

An employer is to provide Workers Compensation insurance to all of its employees engaged in agricultural labor, if during the calendar year, the employer:

-Pays any one employee for agricultural labor at least $1,200; or -Employs any one person in agricultural labor on 30 or more days.

Occupational disease for the purpose of the Workers Compensation laws includes the following:

-Poisoning by a number of chemicals and chemical elements through any work that involves direct contact with or exposure to them; -Caisson disease (compressed air illness); -Radium poisoning or disability; -Skin cancer from tar, pitch, or paraffin; -Skin infection or inflammation from oils or lubricants; -Anthrax from handling or exposure to live or dead animals; -Silicosis (miner's asthma or black lung) from contact with or exposure to silicon dioxide; -Asbestosis and cancer from contact with or exposure to asbestos; and -Tuberculosis, serum hepatitis or infectious hepatitis from work involving blood

The Federal Miner Safety and Health Act of 1977 was enacted to address the following concerns:

-Protecting the health and safety of miners; -Minimizing deaths and serious injuries from unsafe and unhealthful conditions and practices in the coal or other mines; -Providing more effective means and measures for improving the working conditions and practices in the Nation's coal or other mines to prevent death and serious physical harm, and occupational diseases originating in mines; -Minimizing the disruption of production and the loss of income to operators and miners as a result of mine accidents or occupationally caused diseases

An employer may not use the following defenses against an employee's claim for Workers Compensation:

-The injury resulted from the negligence of a fellow employee; -The employee assumed the risk of injury; or -The injury resulted from the employee's negligence, unless the injury was caused by the employee's intoxication or reckless indifference to danger.

Competitive Market

-Workers compensation is purchased by private insurers -Coverage & benefits are mandated by state regulations

Elective laws

-employer not subject to the state's workers compensation laws, -Emoloyer loses its common law defenses against liability suits.

Coverage Part 4 - Your Duties if Injury Occurs

-notify insurer, send notices, cooperate with insurer, non voluntary payment

Compulsory Laws

-require all employers to provide workers compensation coverage -exclusions apply pending size or type of employment -apply ton most stateds

The employer liable for workers compensation will be the employer in whose employment the employee was exposed for a period of no less than

1 year to the hazard.

Other Sources of Coverage

1. Self-insured Employers and Employer Groups 2. State Workers Insurance Fund

The general section is split into 5 different subsections

1. The Policy 2. Who is Insured 3. Workers Compensation Law 4. State 5. Locations

Levels of Disability

1. Total Permanent. 2. Temporary Total 3. Temporary Partial. 4. Permanent Partial.

All actions regarding FELA must commence within

3 years from the day the cause of action began.

Whenever "death" is mentioned as a cause for workers compensation, it will only mean death resulting from injury occurring within

300 weeks from the injury.

The state in which a temporary or new operation exists must be listed in the .....

3C part of the information page.

In no event will the total number of weeks of partial disability exceed

500 weeks

What is the maximum length of time that an employee who is partially disabled can receive loss of time benefits under Workers Compensation?

500 weeks

Under Workers Compensation, the employer or insurance company must designate how many health care providers from which an injured employee may seek care?

6

Employers or the insurer may designate at least

6 health care providers from whom the employee can receive treatment, but at least 3 of them must be physicians.

However, no reduction will be made without

60 days'notice.

Partial Disability Income

66 2/3% of the difference between the weekly wages of the injured employee and that employee's current earning power will be paid. -When an employee has received total disability compensation for 104 weeks, that employee will be required to complete a medical examination within 60 days

Total Disability Income

66 2/3% of the weekly wages of the injured employee will be paid for the duration of total disability. If the resulting benefit is less than 50% of the statewide, average weekly wage, the benefit will be the lesser of 50% of the average weekly wage or 90% of the worker's average weekly wage.

In most cases, disability benefits begin after the

7th day of impairment.

Which of the following statements is true regarding the premium computation for workers compensation insurance?

A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.

Monopolistic state

A state that administers workers' compensation premiums and benefits solely through a state fund, prohibiting employers from purchasing insurance from a private insurance carrier.

What is a second injury fund?

A workers compensation program designed to pay for any additional benefits when an employee with a previous injury suffers a second injury

Long-term policy Condition

All provisions apply to policy period longer than 1 year and 16 days

Employers liability insurance, Part Two of a standard workers compensation and employers liability (WC&EL) policy form, excludes

An intentional act that is caused by the insured.

Secondary Fund pay for...

Any additional benefits that may be required when an employee with a previous injury suffer a second injury

An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?

Benefits will be provided if the state was listed on the policy information page.

Workers Comp. Coverage Parts

Coverage Part 1 - Workers Comp. Coverage Part 2 - Employers Liability Coverage Part 3 - Other State Insurance Coverage Part 4 - Your Duties if Injury Occurs Coverage Part 5 - Premium Coverage Part 6 - Conditions

States with monopolistic state workers compensation funds

Do not allow private insurers to be licensed to write workers compensation coverage

Monopolistic state funds

Employers are required to purchase workers compensation insurance from a state-operated entity.

What is the difference between a monopolistic state fund and a competitive market?

Employers are required to purchase workers compensation insurance from a state-operated entity.

What is the purpose of employers liability insurance?

Employers liability insurance protects the insured from situations that are not covered under a state's workers compensation law.

The Subsequent Injury Fund was established to

Encourage employers to hire workers who had suffered prior compensable injuries.

The provision in Pennsylvania workers compensation that requires an employer to pay compensation, without regard to negligence, according to a compensation schedule set by law, and for the injured employee to agree to limit the employer's responsibility to the amount of workers compensation to which he or she is entitled, is called

Exclusive remedy.

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

Other States Insurance

Extens insurance coverage for new operation in their states on an automatic and temporary basis.. Excluding monopolistic states

Which federal act provides benefits to injured civilians who are employed by the federal government?

Federal Employees Compensation Act

Benefits provided by Disability income payment.....

For an injured employee's loss of wage. Usually expressed by a certain percentage of the injured worker's wages, subject to certain weekly max. and min. For temporary total disability & permanent total disability

Death payments continue ......

For the remaining life of the surviving spouse or until remarriage

Injured employees cannot seek damages outside workers compensation.What does the term "exclusive remedy" mean?

Injured employees cannot seek damages outside workers compensation.

Coverage Part 6 - Conditions

Inspections, long-term policy, assignment, cancellation, sole representative

Benefits provided by Medical payments have..

No dollar limit or time limit set out to pay for necessary medical and surgical expenses, except possibly for certain types of care

In order to become a self-insured under Workers Compensation, an employer would need to show the Commissioner the ability to:

Pay for medical and loss of time benefits in the event an employee is injured.

Which of the following terms refers to an individual's total inability to work ever again?

Permanent total disability

Voluntary Compensation Endorsement

Provides statutory coverage for employees who d o n9t Nell hundreds a state's workers compensations act, such as farm workers

Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations EXCEPT

Second injury funds programs.

Which of the following is a formal program developed by an employer to fund its losses as an alternative to the purchase of insurance?

Self-insurance

In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the

Situs and status test.

State workers insurance fund

Sums paid by employers for the purpose of insuring employers for workers compensation benefits

Which of the following terms refers to a person's ability to do some work or the need to do alternative work?

Temporary partial disability

Which of the following terms refers to a person's total inability to work for a temporary amount of time?

Temporary total disability

Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases?

The employer, regardless of whether it was at fault for the injury or disease

Rating workers compensation insurance

The hazard of the work, the amount of payroll, and the employer's prior loss experience

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state.

Premiums are determined by....

The payroll of each occupational classification & since the payroll cannot know bathe final payroll until the end of the policy period

Employers liability insurance protects the insured from situations that are not covered under a state's workers compensation law.

To pay benefits to employees for injuries arising out of employment

Rehabilitation expenses include..

Vocational training and necessary medical expenses for physical and mental therapy

In order to RECEIVE benefits employee business travel injury or death,

a claim must be filed within 3 years

As an alternative to the purchase of insurance,

an employer may develop a formal program of funding its own losses.

"3A states"

are states in which the employer has employees.

Failure to comply with MSPA may result in .....

civil or criminal prosecution

The initial premium is considered a

deposit and is subject to adjustment at the end of the term

Monopolistic

exclusive possession or control over the supply of or trade in a commodity or service

In Pennsylvania, Workers Compensation is considered to be ...

exclusive remedy.

Cancellation Condition

insurer must provide 10-day advanced written notice prior to cancellation

The Jones Act

is a federal act that covers ships' crews (spends more than 30%) with the same remedy available to railroad workers.

Exclusive Remedy

is a state Workers Compensation statute that gives employees a definite remedy for injuries and diseases arising out of or suffered in the course of their employment.

Federal Employers Liability Act (FELA)

is an employer's liability law rather than a workers compensation law. It predated workers compensation and makes an interstate railroad liable for bodily injury sustained by employees.

Experience Modification Factor

is developed by a rating bureau. The calculations relate an employer's losses, payroll, and premiums, segregated according to classifications of operations, all as reported to the bureau by the employer's insurance company.

Estimated payroll figures are used when a policy is

issued, and the final premium is determined by an audit.

If the employer or insurer designates these health care providers,

it may require that the employee visit one of them for 90 days after the initial visit.

Exclusive remedy

meaning the benefits provided under workers compensation are the sole remedy; employees cannot sue employers for additional damages

The Longshore and Harbor Workers Compensation Act, and its extensions, provide

medical benefits, compensation for lost wages, and rehabilitation services to employees who are injured during the course of employment, or contract an occupational disease related to employment.

Subsequent Injury Fund promotes the hiring of individuals who were previously injured and who, because of this injury,

new employers are reluctant to hire because of a fear of a more serious disability or higher claims frequency. This fund would pay some or all of the additional compensation because of the second injury.

The Wage and Hour Division of the U.S. Department of Labor investigates.....

premises and payroll records and interviews workers to determine compliance with MSPA.

Migrant and Seasonal Agricultural Worker Protection Act (MSPA)

protects migrant and seasonal agricultural workers by establishing employment standards related to wages, housing, transportation, disclosures and recordkeeping. The MSPA also requires farm labor contractors to register with the U.S. Department of Labor.

Temporary partial disability

refers to a person's ability to do some work or the need to do alternative work.

Temporary total disability

refers to a person's total inability to work for a temporary amount of time.

Permanent total disability

refers to an individual's total inability to work ever again.

Permanent partial disability

refers to such disabilities as the loss of a limb, hearing, or eye sight.

Compulsory

required by law; mandatory

Assignment Condition

rights and duties cannot be transferred without written request

Farm Labor Contractor

s someone who, for money or other valuable consideration, recruits, solicits, hires, employs, furnishes or transports migrant and/or seasonal agricultural workers, or provides housing to migrant agricultural workers. This does not include agricultural employers, agricultural associations and their employees.

Every employer liable to pay workers compensation must insure this payment through

the state's Workmen's Insurance Fund or any other insurance company.

The workers compensation policy is very different from other policies because ......

there are no coverage amounts listed in the policy or on the information page for statutory benefits.

Whether or not any dependents survive the employee, the employer or insurer will pay the cost of reasonable funeral expenses,

up to $3,000

The policy will pay

whatever is in place in the applicable state where a covered injury occurs.

Competitive market

workers compensation is purchased by employers from those insurers authorized to write casualty insurance.