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NEWSLETTERS
NEWSLETTERS
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In this issue
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Case Study: Combining Hotels Saves Owner $823,000 and Lowers Experience Mod
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Return-to-Work: Do's and Don'ts of Transitional Work Assignments
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Q & A: Integrating Workers' Compensation, FMLA, ADA, and COBRA |
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Case Study: Combining Hotels Saves Owner $823,000 and Lowers Experience Mod
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Insured
Five hotels, under a single ownership, with four located in New York and one in Florida. The company employs more than 2,000 with premiums in excess of $1.8 million.
Situation
The company's Experience Modification Factor and premiums had climbed steadily and ownership was unaware as to why they were seeing such high costs.
Assessment
Certified WorkComp Advisors (CWCAs) did an analysis and discovered that the hotels were being issued independent Experience Modifications. These varied, with some hotels having more favorable loss experiences than others, as well as differing payrolls. The relationship of ownership and experience ratings is one of the most complex parts of the experience rating process, but the CWCAs were well-trained and felt it would be beneficial to examine the possibility and outcome of combining the ratings.
Solution
The CWCAs examined the Mod worksheets from various insurance carriers and the hotel's ownership information to take a closer look at each hotel separately, to see which ones could be combined. It turned out, after close scrutiny, they could ALL be combined. The CWCAs then went on to work with the insurance carriers and the NCCI to make all necessary corrections and adjustments, retroactive back to 2003. They also established annual checks and continued to work closely with the Ratings Board to ensure the hotels' Mod would continue to be issued correctly.
Result
Because of the work by the CWCAs, the ownership of the five hotels saw a return of $822,808 in premium, along with an Experience Mod drop from 1.26 to .84.
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Return-to-Work: Do's and Don'ts of Transitional Work Assignments
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Early return to work following an injury helps control costs directly related to the injury and reduces the potential impact on the business as well as on the injured employee's life. Consider the employee who injured his back while loading and unloading a truck. Sitting at home he is probably thinking about how terrible he feels or worse, how his predicament is YOUR fault.
A much better solution is to get the employee back to work in a modified, transitional position that matches his medical capabilities. Studies show that injured workers who are allowed to return to productive work as early as possible following an injury heal faster and better than those injured workers who remain off work.
Developing and integrating an early return-to-work program into routine business operations is a "win-win" situation for employers and employees. It prepares everyone ahead of time as to what will happen in the event of an injury and becomes an expectation of both employers and employees.
A key element of a successful return-to-work program is the availability of transitional work assignments: temporary work assignments, not jobs, that are intended to facilitate the transition from temporary medical restrictions to the resumption of full duty in the usual job. They are designed to address the needs of employees who have temporary impairments that can be resolved within a limited period of time, often defined as a maximum of 90 days. Here are some do's and don'ts:
Do's
* Work with supervisors and employees to develop a list of tasks that can be performed by injured workers as temporary assignments. Tasks should be meaningful and productive. Consider jobs or tasks that should get done, but are rarely done due to lack of time; tasks that will help other employees work more efficiently; and jobs that are presently outsourced.
* Have the treating doctor provide a Work Status Report. Then match the transitional assignment that has duties within the employee's work abilities as determined by the employee's treating physician.
* Make the offer of modified duty in writing. The offer should include a copy of the Work Status Report; the location at which the employee will be working; the work schedule; the wages that will be paid; a description of the physical and time requirements that the position will entail; and a statement that the employer will assign tasks consistent with the employee's physical abilities, knowledge and skills and will provide training if necessary.
* Be sure that both supervisor and employee understand the injured employee's temporary medical restrictions and see that they are not exceeded.
* Ensure that all transitional work is temporary. Utilize evidenced-based standards of disability duration and communicate an expected start and end date of the transitional assignment to the employee, the treating physician, and the supervisor prior to beginning the assignment.
* Monitor progress. Follow up with the treating physician; get feedback from the employee and the supervisor. Transitional work assignments are progressive and should be adjusted in line with medically documented changes in the employee's ability.
* Since the transitional assignment is short-term in nature, do not reduce the employee's pay. While the employer may have the right to reduce pay, the best results come from employers who do not do so. Reducing pay can have a negative effect on the employee's attitude and if reduced too much could mean some indemnity would have to be paid.
* Let injured workers know how pleased you are that they are back to work and ask often how they are feeling.
* Make participation mandatory. Have a clearly written policy that explains the consequences if an employee refuses a transitional assignment that is consistent with the physician's instructions. Be sure the policy complies with all state and federal statutes.
Don'ts
* Allow workers in transitional assignments to exceed their medical restrictions.
* Be deterred from setting up transitional assignments because the employee "may get hurt again." This of course is a risk, but an even greater risk is having the employee stay at home and develop a "disability attitude" that extends the absence and drives up costs. Be sure job assignments meet the medical restrictions set by the treating physician and stay in touch with the employees as to their comfort level with the assignment.
* Offer demeaning or "make-work" assignments that will make workers feel badly and/or be viewed as punishment.
* Change expectations of punctuality, attendance, proper notification for time off for medical appointments, etc. The employer's policies and work rules should apply to employees who are performing transitional work assignments.
* Consider yourself "too small" for such a program. Finding appropriate transitional work is not as difficult as it may seem and return-to-work programs can reduce the cost of claims significantly.
* Neglect to let the treating physicians know about your program. Do engage them in helping to identify transitional assignments that are appropriate for the injured employee.
* Administer the program inconsistently. Clear standards and policies need to be in place to ensure that all employees are treated fairly and consistently.
* Allow transitional assignments to continue indefinitely. Set clear expectations of time frames. If an employee is unable to return to their permanent job in a time frame consistent with evidenced based guidelines, there are probably underlying issues that need to be addressed.
* Allow a worker to remain in a transitional assignment after being released to full duty by the physician.
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Q & A: Integrating Workers' Compensation, FMLA, ADA, and COBRA
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Q."If a worker is injured, doesn't Worker's Compensation take precedent?"
A. The relationship between Workers' Compensation, FMLA, ADA and COBRA is perplexing and continues to confound even the most knowledgeable HR executives and lawyers. An injured employee may have rights under each of the statutes and the employer must analyze the circumstances of an individual employee separately under each of the laws. Once understood, the employer must then examine how they interact.
Q."I have an employee who was injured on the job and is expected to be out of work for six to eight weeks. Can this time off be treated against the FMLA's entitlement of 12 weeks?"
A. Under FMLA, it is the employer's responsibility to establish the FMLA leave. The employer must notify the injured employee, in writing, that the Workers' Compensation leave will run concurrently with and be treated against the employee's FMLA entitlement of 12 weeks. This notification must include the proper information to meet FMLA requirements.
Q. "Do I have to maintain health insurance benefits for employees who are out on Workers' Compensation leave or can I put them on COBRA?"
A. Here again the interaction of Workers' Compensation, FMLA, and COBRA come into play. If the injured employee is eligible for FMLA, the employer must maintain the employee's health insurance benefits on the same terms as before the leave. Once the employee has exhausted the 12 weeks of FMLA leave, the employer can then offer the employee coverage under COBRA.
If the injured employee is not eligible for FMLA, a reduction in hours due to a job-related injury is considered a "qualifying event" for COBRA, if it results in a loss of health coverage. Collective bargaining agreements and other employment policies may affect this right.
Alternatively, the employer may have the option of maintaining health insurance benefits, depending on the terms of the health insurance plan documents.
Q."Is an employee who is "disabled" under Workers' Compensation automatically classified as "disabled" under ADA?"
A. A "disabled" employee for Workers' Compensation purpose may not necessarily be "disabled" under the ADA. The Employment Opportunity Commission ("EEOC") issued guidelines September 3, 1996 state, "Workers' Compensation laws are different in purpose from the ADA and may utilize different standards for evaluating whether an individual has a "disability" or whether s/he is capable of working."
Whether an impairment results from an occupational or non-work related injury, one of the following criteria must be met to claim an ADA disability: (1) a physical or mental impairment that substantially limits a major life activity; (2) a record of such an impairment; or (3) being regarded as having such an impairment. An employee who has filed a Workers' Compensation claim does not automatically have a disability under the 'record of' portion of the ADA definition.
Employers must undertake a careful analysis under the ADA before making any employment decisions involving disabled employees. As a federal law, the ADA supersedes state Workers' Compensation laws, and therefore, its directives provide the floor level protection for disabled individuals. State Workers' Compensation laws can provide more protection, but not less.
Q."How do these laws affect Return-to-Work programs?"
A. If an employee is eligible for FMLA leave, the employer may offer a transitional work assignment that meets the employee's medical restrictions, but the employee has the right to refuse. However, the FMLA only creates an entitlement to unpaid leave, and therefore, the indemnity payments may discontinue with the refusal to return to work. If the employee accepts the offer, the period spent on transitional assignments cannot be counted against the 12-week FMLA entitlement.
Under ADA, an employer must assess whether the employee can perform the essential functions of his/her original position with reasonable accommodation. Reasonable accommodation is not the same as temporary, transitional work. The rules are complex and should be evaluated on a case-by-case basis.
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Employee Health is an Asset: Tips for Motivating Employees to Better Health
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More and more employers of all sizes recognize that there is a direct line between healthy, engaged workers and the company's bottom line. Healthy workers are more productive, have fewer Workers' Compensation claims, and have lower health care costs.
There is little doubt that the lifestyles of many Americans are a threat to productivity. According to researchers at John Hopkins Bloomberg School of Public Health Center for Human Nutrition, 66% of adults were overweight or obese in 2003 and 2004 and by 2015, 75% of adults will fit that profile.
A Duke University Medical Center analysis found that obese workers filed twice the number of Workers' Compensation claims, had seven times higher medical costs from claims, and lost 13 more days of work a year from work-related injuries or illness than did non-obese workers.
Recognizing the economic costs of poor health, many employers are implementing wellness programs to encourage employees to adopt more healthful lifestyles. Yet these programs will only be successful if employees participate in them and remain committed over the long term. Here are some tips for encouraging participation:
1. Identify the behavior that needs to be changed. While smaller companies may feel they do not have the resources for a comprehensive program, they can benefit by helping employees change behavior with simple, well-managed programs. Focusing on issues that will improve the work life will benefit both employers and employees.
2. Make access easy, ideally within the workplace. Remote programs are often dependent on self-motivation that fades with the passage of time.
3. Make the program as personal as possible. A customized process will be more effective in engaging workers over the long-term.
4. Build trust and commitment with education and health risk appraisals.
5. Start at the time of hire. Incorporate health and fitness promotion, as well as injury prevention, into your initial training.
6. Offer an incentive - monetary or non-monetary, but significant enough to make a difference to employees. Financial incentives such as cash or gift certificates or varying the amount of premium contributions/deductibles for health insurance are popular. Penalties are sometimes combined with incentives. Such programs need to comply with federal and state laws and must be tied to behavior and not health status.
7. Monitor the results and communicate the aggregate results to employees - participation level, goal achievement, etc. - to engage more employees over time.
8. Adopt a culture of health in the workplace. It was not that long ago that the mantra was to adopt a culture of safety in the workplace and employers were rewarded for their efforts with a significant decrease in the number of work-related injuries. A culture of health conveys an interest in the overall well-being of employees and will contribute to reduced absenteeism, improved productivity and morale.
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