There are a lot of different outcomes that can happen when you file a claim with your workers’ compensation policy. It depends on the amount of the claim and the type of claim. In this blog we’ll break down the types of claims, show how they can affect your policy differently, and ways to reduce the claim impact.
Medical vs. Medical and Indemnity Claims
From an experience mod rating perspective the best type of claim you can have on your experience mod report is a medical-only claim. A medical-only claim in the formula has the loss amount reduced by 70% in most states. In fact, the majority of claims are medical-only claims across the country.
When you have a medical and indemnity claim, the weight of the claim will be valued at 100% in the rating formula. This is one of the many reasons a return to work strategy is key for your business. It will help keep overall costs low.
Medical only claims
A medical only claim is exactly what it sounds like, payment for medical services only. Typically, these claims are minor and result in a visit to a clinic or doctor and the injured worker is able to return back to work.
Medical and indemnity claims
This type of claim is when there is payment for medical services and additional indemnification to the employee such as payment for lost wages, physical impairment, or permanent disability. These claims tend to me more costly and can be reflective of the businesses overall safety practices.
Ways to Reduce the Claim Impact
There are a few factors of workers’ compensation that you, as a business owner, can control. Keep these in mind when making a plan to reduce the claim impact on your policy.
Written Return to Work Offer
Have a return-to-work strategy in place, and create a written return to work offers for employees who have been injured on the job, but can perform light-duties. Pinpoint the duties the injured employee can still perform and in what capacity they would be able to work. With a written offer to return to work, if the employee refuses they may not be eligible to receive future indemnity payments from the insurance provider as they are refusing work.
Reduction of Fraudulent Claims
Fraudulent claims cost policy providers and businesses nearly 7 billion dollars per year, according to NCCI. Make it clear to employees that you will not tolerate fraudulent claims and create a safe way for employees to report suspicion of fraudulent workers’ compensation claims. If you suspect a fraudulent claim has been submitted by an employee, report this to your state insurance agency, and reach out to a workers’ compensation lawyer for further action.
Encourage Timely Reporting
Reporting the incident as soon as possible helps ensure that all relevant details are accurately documented. Let’s say your employee has an incident and decides not to report it. Three weeks go by, and now their pain is so bad they are unable to work. It’s hard at this point to investigate or prove the claim details and typically these type of claims lead to higher costs and potential litigation. Encourage reporting and have a proper plan in place that employees have easy access to.
Working with a work comp professional that is aware of the different type of claims, how to report them, and different strategies to use to reduce the impact can be extremely helpful to your business.
*The information contained in this document is for informational purposes only and is not intended to be a substitute for professional, legal, or insurance advice