Over the years, we have seen employers choose to handle some of their own Workers’ Compensation insurance claims rather than report them and go through their insurance carrier. While self-handling a Workers’ Compensation claim may seem as if it will save an employer money, it more often than not poses several problems and ends up costing employers more in the long run.
Employers who choose to handle a Worker’s Comp claim on their own typically do so to avoid having the claim impact their experience modification and future premiums. Some employers with a deductible Workers’ Compensation program think they might as well pay for the medical expenses themselves since the amount falls within their deductible. Doing so, however, can lead to several unanticipated issues.
Carriers Are Equipped to Properly Investigate an Accident
When a Workers’ Compensation claim goes unreported, it impedes the ability of the insurance carrier to investigate a claim, determine compensability, and identify fraud. Carriers conduct background and social media checks and have access to information such as prior claims history. They also take an initial statement from the injured worker and any witnesses in order to gain a complete picture of the incident or accident that caused the injury.
In addition to not being equipped to conduct the same type of accident investigation as a carrier, an employer typically doesn’t take and document initial statements. Failure to conduct a proper accident investigation ends up hampering the ability to address a claim that may change down the road. Additional injuries may be brought to light as time goes on, resulting in higher medical costs.
Employers Are Not Familiar with Rules, Requirements
Employers also do not understand the requirements and rules regarding benefit payments. They are unfamiliar with the fundamental components on which Workers’ Compensation claims payments are based, i.e., a fee schedule, a PPO, or a combination thereof. Because insurance companies negotiate a reduced fee schedule for occupational injuries, an employer paying a medical bill will pay more than a Workers’ Compensation carrier would pay for the same bill.
In addition, in some states, there are rules about direct care and the use of medical panels. In a panel state, employees choose from a list of providers that the employer provides. When employers self-handle a claim, they could lose the ability to control medical care provider choices, with claim costs potentially spiraling out of control.
Employers that don’t report Workers’ Compensation claims to the state as required within the specified time period open themselves up to additional exposure, including having to pay a penalty or fine in some states. The penalty, for example, in New York, for missed or late reporting is up to $2,500.
Greater Potential for Attorney Involvement
When protocols are not followed involving medical and benefit payments, there is also a greater possibility for an injured worker to get an attorney involved if he or she is unhappy. Employers have to contend with attorney fees and additional costs, driving up expenses on a claim they thought they could easily handle. Employers will then turn to carriers to take control of the claim, which was not properly handled in the first place. Additionally, the money already paid by the employer does not apply toward the policy deductible.
All Workers’ Compensation claims should be reported to Prescient National immediately to get the best outcome for both employers and employees. Employers will meet state requirements and ensure that medical payments are paid timely and in line with the injury. If an employer wants the injury to be treated as a medical-only claim with no lost-time paid under Workers’ Compensation, this can be done. The employer can continue to pay the injured employee’s salary and make him or her happy, keep indemnity costs down, and help avoid the potential for the employee to retain counsel.
