National Council on Compensation Insurance Says Younger Workers Are More Accident Prone

According to a study conducted by the National Council on Compensation Insurance, younger workers have more injuries and illnesses than older workers; but older workers have higher costs per claim. The researchers discovered that age is an important factor in overall claim costs, but the significance of age on claims frequency has lessened. This has been interpreted to mean that age may not play an important role in future frequency trends. However, the relationship between age and claim severities is basically unchanged.

Factors associated with age, such as average wages, claim durations, lump-sum payments, injury diagnoses, and number of medical treatments, comprised a large part of the reason for the differences in the severity of claims between younger and older workers. The differences in wages and duration of claims were the principal reasons for the differences in the amount of payouts between younger and older workers. Differences in wages accounted for approximately one third of the differences in the amount of payout, while the differences in the duration of claims accounted for almost one half the difference.

Older workers experience more high cost injuries, such as injuries to joints like rotator cuffs and knees. These were more commonly experienced by workers aged 45-64.  Workers aged 20-34 more commonly experienced ankle sprains. Carpal tunnel syndrome and injuries to the lower back are among the top 10 diagnoses for workers of all ages. The researchers pointed out that the differences in the types of injuries only comprised about a quarter of the difference in medical severities between younger and older workers. The real factor influencing the difference in medical severities between older and younger workers was the significantly higher number and different mix of treatments within a diagnosis. This alone accounted for 70 percent of the difference.

Less than 10 percent of the difference in medical severities is due to a slightly more costly mix of treatments for older workers. This was reflected in small differences in the average prices of different types of medical services. The greater number and different mix of treatments also contribute to the longer duration of payments for older workers.

As for trends in loss costs, the researchers noted that the baby boomers’ impact was apparent when the data was viewed historically, but the major impact of this aging workforce has probably already occurred and employers should not anticipate that the aging workforce would present a major problem in terms of future claims costs.

More Workers’ Compensation Claims Made As the Result of Work-Related Traffic Accidents

According to the Network of Employers for Traffic Safety, both on- and off-the-job motor vehicle crashes cost employers $60 billion annually from 1998 through 2000. The problem is so widespread, that in a recent study, the National Council on Compensation Insurance Inc (NCCI) noted that traffic accidents are the leading cause of accidental deaths in the United States. The study also said that workers’ compensation claims resulting from motor vehicle accidents are more severe than the average claim. Although they make up approximately 2 percent of all claims, they account for more than 5.5 percent of all losses because they cover a disproportionate share of the most severe claim types.

While workers’ compensation claims from motor vehicle accidents are growing, their frequency is declining but at a slower pace than for workers’ compensation claims in general. There are some other important characteristics about these claims that the NCCI noted in its study:

·   They almost always involve time lost from work.

·   Neck injuries are the most frequent diagnoses in these claims.

·   The average duration for a motor vehicle claim is 70 percent longer than for other types of claims.

·   They are three times as likely to involve a claimant attorney as compared to other types of claims.

The leading cause of these claims is a traffic accident that happened because the driver became distracted. The study revealed that almost 80 percent of the crashes and 65 percent of the near crashes resulted from the driver becoming distracted within three seconds of the event. The chief causes of the distraction were drowsiness and cell phone use.

The researchers had some specific suggestions regarding the steps employers can take to reduce the frequency and severity of these claims:

·  Encourage your employees to use seat belts – Failure to use seat belts cost employers roughly $2.1 billion yearly from work-related crashes between 1998-2000.

·  Be sure your employees never drive under the influence of alcohol – During 1998-2000, work-related crashes that resulted from drivers being intoxicated cost employers $3.1 billion annually.

·  Encourage employees to take defensive driving courses – These courses teach drivers how to react during an emergency so as to lessen the severity of the accident or avoid it all together.

·  Provide internal driver’s education courses – Teach employees good driving practices like pre-planning the trip route, realistically estimating how long the trip will take, being sure the vehicle is in good condition before hitting the road, and informing colleagues about travel plans.

Workers’ Comp Employer Costs Rose Faster Than Benefit Payments in 2004

According to a study released in July 2006 by the National Academy of Social Insurance, employer costs for workers’ compensation grew faster than combined cash and medical payments to injured workers in 2004, the most recent year for which data is available. Combined benefit payments for injured workers increased 2.3 percent in 2004 compared to prior year levels, while employer workers’ compensation costs rose by 7.0 percent for the same period.

Combined benefit payments fell by 3 cents for every $100 of covered wages, from $1.16 to $1.13. The chief contributor to this decline was the state of California, where benefits dropped by 10 cents per $100 of covered wages. Nationally, premiums paid for workers’ compensation insurance rose by 3 cents per $100 of covered wages, to $1.76 in 2004. The increase was the smallest annual increase since 2001.

Despite the recent rise in costs, both costs and benefits in 2004 remain far below their peak levels. Total benefits were at their highest in 1992 at $1.68 per $100 of covered wages, 55 cents higher than the 2004 figure. Employer costs were highest in 1990 at $2.18 per $100 of covered wages, 42 cents higher than in 2004.

Since 2000, the rise in benefit payments has resulted from increased spending for medical care. Spending for medical treatment rose from 47 cents in 2000 to 53 cents per $100 of covered wages in 2004. Spending for cash payments to workers remained the same during this period at 60 cents per $100 of wages.

There are specific actions employers can take to curb workers’ compensation costs. The first step is to examine accident records for the past three years. Take each year’s reports and examine as a whole. While reviewing look for specific accident causes and note hazards that should be remedied. You should also be looking for injury repetition and in which department injuries frequently occurred.

The next step is to conduct a physical analysis of the workplace. Utilize your health and safety committee as the catalyst, but be sure workers are also involved. Look for equipment hazards that need replacement or repair. Then search for environmental hazards such as chemical exposures, noise, temperature and ventilation issues.

The third step is to look for task or ergonomic hazards. Request employee input to encourage workers to take ownership of safety in their departments. When workers provide input, make sure actions resulting from their suggestions are documented in health and safety committee minutes and posted on bulletin boards in common areas. If employees do not feel their suggestions matter, they won’t bother to suggest improvements in the future.

Worker Found Eligible for Compensation from Seizure Related Injury

In an August 2006 ruling, Connecticut’s Supreme Court ruled that the claimant in the case of Michael G. Blakeslee Jr. vs. Platt Brothers & Co, who was injured when co-workers tried to help during a seizure, is entitled to workers’ compensation benefits. Typically, workplace injuries caused by a seizure wouldn’t be eligible for compensation because the injuries arise from the medical condition itself and not from conditions in the work area. In the Blakeslee case, the claimant received two dislocated shoulders on February 13, 2002, when three co-workers tried to restrain him during his seizure. He had fallen near a large steel scale, and then started flailing his arms and legs as he regained consciousness.

The claimant filed a workers’ compensation claim contending that because the actual injury resulted from the restraint, and not the seizure itself, the shoulder injuries should be covered. The claimant argued that an injury received during the course of employment is eligible for compensation even if infirmity due to disease originally set in motion the final cause of the injury. The claimant also asserted that an injury inflicted by a co-employee is eligible for compensation, unless the injured employee engages in unauthorized behavior or the injury is the result of an intentional assault.

Initially, a workers’ compensation commissioner decided that Blakeslee was not entitled to workers’ compensation benefits. The commissioner determined that the claimant’s injuries resulted from a chain of events set off by a grand mal seizure unrelated to his employment. A workers’ compensation review board agreed with the finding. The review board stated that there is a prerequisite requirement for eligibility for compensation, which the claimant overlooked. The cause of the injury must arise out of the employment and work conditions must be the legal cause of the injury. The review board contended that the claimant’s seizure caused the need for first aid, which caused the injury. There was no element of the claimant’s employment involved.

Five out of seven Supreme Court justices reversed the board’s ruling. They were not persuaded by the argument posed by Platt Brothers, and the employer’s insurer, Wausau Insurance Co., that finding for the defendant would be in direct opposition to public policy because it would prevent employees from assisting co-workers in future medical emergencies. The majority noted that the co-workers restrained Blakeslee to keep him from harming other employees as well as himself. Their actions benefited the employer. The action was directly related to the employment and would therefore be eligible for compensation.

The two dissenting justices argued that the Supreme Court should not have accepted review of the case.

Workers’ Compensation Is Necessary to Protect Businesses and Employees

Because workers’ compensation pays for medical expenses from on-the-job accidents and work-related injuries, it protects both the employer and the employee. In fact, most states require workers’ compensation for certain employer groups. In addition, as insurance agents we strongly recommend all employers carry this coverage (regardless of the number of employees) as an obvious protection against liability.

Yet, workers’ compensation can be costly for small- and even medium-sized businesses. Therefore, laws enacted in the late 1980s allow the use of “preferred providers” to curb medical care costs and promote a quicker return-to-work process, with increased emphasis on fraud detection and better price points among workers’ compensation insurers. Even so, the coverage and price of workers’ compensation policies still vary greatly.

With this mind, it pays to shop around for workers’ compensation packages that fit your needs, and your budget. Also, check with your state’s labor department for its definition of an “employee” as it may include a full-time, 40-hour-per-week person, as well as someone who only works three hours a week. Obviously, such variances will affect your needs and your cost for the plan.

Each state has its own workers’ compensation requirements, including a list of illnesses and injuries that qualify for legitimate claims. The state also mandates the level of benefits you must provide for employees. These rules will typically address the amount of coverage required for each employee and the percentage of the employee’s salary that you must pay. A good idea is to review this list and keep it accessible for future reference for you and your employees. These initiatives will prevent the filing of uncovered claims and serve to minimize misunderstandings.

Workers’ compensation policies may pay medical benefits, disability income benefits, rehabilitation benefits, and death benefits. These policies may also utilize a managed care program that sends injured or ill employees to a doctor in your insurance company’s network, further protecting the employer while minimizing costly confusion.

As with all insurance plans, too much workers’ compensation coverage is certainly better than too little. In addition, many workers’ compensation insurance policies provide liability insurance to cover you and your business in the event the family of an employee who is killed in the workplace sues an employer. This option should also be closely examined when striving for maximum coverage.

Keeping Up with the Jones and the Longshore and Harbor Workers’ Compensation Act

Navigating the winding straits of various state workers’ compensation systems can be difficult to do for companies traversing state lines, but what if the company employs people at sea?  If your business employs dockworkers or seamen of any sort, there are two acts you should be aware of.

The Jones Act (1920) – The Jones Act is a set of cabotage, or “admiralty” laws.  Cabotage defines who has the right to engage in air, rail, truck or waterborne transportation in a country and its coastal waters.  The Jones Act focuses on the latter.

Modeled in part after the Federal Employers Liability Act, which provides benefits to rail workers, the Jones Act governs the liability of vessel operators and marine employers for the work-related injury or death of an employee.  The Jones act provides heightened legal protections to seamen because of their exposure to the perils of the sea but does not define the term “seamen.”  Federal court decisions have narrowed the definition to exclude land-based workers, though.  Workers on offshore oil rigs, ships, barges, riverboat casinos, tug boats, shrimp boats, fishing boats, trawlers, tankers, crew boats, ferries and water taxis are among those who are eligible for Jones Act relief if injured. 

The Longshore and Harbor Workers’ Compensation Act (1927), a companion of sorts to the Jones Act, provides scheduled pay for injury or death, to a broad range of land-based maritime workers, excluding those covered under The Jones Act.  Usually, employees who load or unload vessels, build or repair ships, and stevedores are among those eligible for LHWCA status.  Unlike The Jones Act, which is not administered by a federal or state agency, The Department of Labor administers LHWCA.

Although differentiating among employees eligible for consideration under the two acts seems simple, much litigation has ensued over the years since the two acts came into being, because “the myriad circumstances in which men go upon the water confront courts not with discrete classes of maritime employees, but rather with a spectrum ranging from the blue-water seamen to the land-based longshoreman.” Brown v. ITT Rayonier, Inc., 497 F.2d 234, 236 (CA5 1974)

Broad P & I (Protection and Indemnity) policies, Maritime Employers Liability and Maritime Workers’ Compensation products are available to cover Jones Act or LHWCA liability.  Some products combine coverage for state workers’ compensation acts and Jones Act or LHWCA exposures.  There are also policies available for employers with no “known” Jones Act exposure.  

Although coverage for the liability imposed by employers under these acts may be more expensive than state workers’ compensation coverage, there may be penalties for non-compliance.  LHWCA, for example, imposes a fine of up to $10,000 and/or imprisonment of up to a year.  Talk to your agent to discuss your exposures and to see what options are available.

Workers’ Comp Claims for Mental Illness May Be Difficult to Diagnose, But Are Real in Today’s Workplace

When one thinks of workers’ compensation, images of workplace accidents and occupational diseases come to mind. Though the vast majority of workers’ compensation cases do involve claims for physical injuries and conditions, a small-but potentially growing-portion of workers’ compensation cases are based on mental or psychological claims, particularly related to stress experienced on the job.

Mental workers’ compensation cases fall into one of three categories: physical/mental, mental/physical, or mental/mental. A physical/mental claim involves a workplace physical injury that has progressed to a mental condition or disability; an example would be a back injury that lingers, and that results in the worker lapsing into clinical depression. A mental/physical claim involves a psychological condition arising out of the worker’s employment that has caused a physical illness; an example would be workplace-induced stress that causes ulcers. A mental/mental claim involves a psychological occurrence in the course of employment, which leads to a psychological injury or condition; an example would be an employee who witnesses a horrific workplace accident involving a co-worker, and who later develops a fear of operating the same equipment on which the co-worker was injured.

As with workers’ compensation claims that have only physical components, in order to be compensable, the claimed injury or condition must arise out of or occur during the course of employment. Some types of mental injuries are difficult to prove under this standard. For example, symptoms of physical ailments caused by stress (e.g., ulcers, heart attacks) may appear only after working in a stressful workplace for a long period of time. Furthermore, unlike claims based on a workplace accident, mental claims may not be linked to one particular incident, but rather to months or years of stressful working conditions.

Another example of the complexity of the cause-effect link in mental workers’ compensation claims is seen in claims based on post-traumatic stress disorder (PTSD). PTSD is a delayed psychological response to experiencing an extreme situation that overwhelms one’s usual ability to cope. Most commonly thought of in connection with soldiers and wartime, discussions of PTSD arose after the September 11 terrorist attacks. Though few would doubt the psychological impact of witnessing the devastation in New York or Washington first-hand, by definition, symptoms of PTSD do not appear for months or years after the event, making their connection to the workplace event difficult to assess.

Mental workers’ compensation claims represent a tiny percentage of all claims; estimates put claims with a mental component at about 1% of claims overall, although this figure varies by state. For a period of time in the 1980s and early 1990s, the incidence of claims with a mental component rose in some states, but stricter requirements imposed by state lawmakers, workers’ compensation boards, and courts stemmed this trend. In particular, mental/mental claims are least recognized.

Though workers’ compensation claims with a mental component represent only a small minority of claims today, the reality of the modern workplace should motivate all employers to be alert to their existence. White collar workers-who are most likely to claim an injury with a mental component-make up an ever-growing portion of the U.S. work force. Furthermore, today’s workplace puts great pressure on employees to be productive and cost-efficient. Many workers live with fear of job loss, as businesses continue to seek optimum competitiveness through “right-sizing.” All of these factors can breed stress.

All employers can take some basic steps to deal with increased stress levels in the workplace-

• Be alert to signs of stress among employees, and solicit input from employees and managers on this issue. Be aware that certain events, such as layoffs, may trigger stress levels in employees beyond what is to be expected on a day-to-day basis.

• Make employee assistance program (EAP) services available so that workers have ready access to help with dealing with stress.

• In the event of a severe workplace trauma, arrange for on-site intervention and counseling services.

Though these steps will not make a business immune from the possibility of a workers’ compensation claim with a mental component, they will, at the least, help make stress recognition and prevention part of the workplace ethic.