State Compensation Insurance Fund has announced that it will pay out a dividend to qualifying policyholders for the first time in a decade. The state’s largest workers’ comp carrier plans to disburse a total of $50 million in the form of a dividend, mostly to employers who have paid their premiums in a timely fashion.
Originally State Fund wanted to pay the dividend only to policyholders that were renewing their policies for 2012, but after touching off questions over the policy’s legality, it reversed and eliminated the requirement. Typically too, dividends are made available only to companies that keep their claims to a minimum.
The State Fund board, which announced the credit in November, said it had waived the renewal requirement, following discussions with the California Department of Insurance.
The dividend resolution approved by State Fund’s board lays out the prerequisites for a cash dividend or a credit upon renewal:
• Completion of the final audit on the insured’s 2011 policy within 18 months of the 2011 policy’s renewal or effective date.
• The policyholder is up-to-date with all premium payments when the cash dividend or renewal credit is awarded.
• It is determined that the policyholder is complying with all policy requirements.
If you think your company may qualify, speak to your broker.
Here’s a little something to think about as we head toward the end of the year. There’s been a disturbing rise in the number of Workers’ Compensation claims from people who recently lost their jobs. A post termination claim prevents the unemployment insurance clock from ticking while providing money and health insurance to the claimant.
Workers who feel that their jobs are in jeopardy take more time to return from disability. After all, in their minds why rush if getting healthy means a pink slip. “There is a [claims] cost,” Darrell Brown, workers’ comp practice lead for Sedgwick Claims Management Services Inc., told Business Insurance. “If someone knows that their job is going away, or has been eliminated, the motivation to return to work is much less.”
People who know they may be facing a lay-off may also balk at return-to-work programs aimed at integrating them back into the workplace, even if they must enter into modified work arrangements.
There are two ways the recession can negatively affect workers’ comp claims from the employer’s angle:
1. Employees that have already been terminated may also try to reopen old claims or even file new claims. These would likely be for progressive soft-tissue injuries or back injuries, which are often hard to dispute.
2. Employees that were injured earlier on the job may try to stay on the dole longer, particularly if their employers have already engaged in lay-offs.
Risk managers recommend that employers along with claims adjusters be more alert for illegitimate claims. Also, try to get open claims off the books as quickly as possible. A good way is to identify claims that can be closed – when medically feasible and close them.
Another safeguard is for the employer to write up highly descriptive job functions in company documents. If written properly, the documentation can show the doctor that the worker is able to return to his or her job, be it with their present employer or another. Taking these step can help reduce your exposure and keep claims to a minimum.