There are a lot of different outcomes that can happen when you file a claim with your workers’ compensation policy that we’ll discuss. The outcome that affects your business and policy will depend on the amount of the claim and the type of claim.
In this blog post we’ll break down the types of claims and show how they can affect your policy differently.
MEDICAL ONLY vs MEDICAL AND INDEMNITY CLAIMS
There isn’t a good claim, but if there were, the best type of claim you can have to roll on your experience mod is a medical-only claim.
A medical only claim is defined as any claim that involves treatment at a medical facility and which there was no lost time at work and no permanent injury.
A medical-only claim has a reduced weight to your policy. The claim amount is discounted by 70% and the lower value is used in the mod calculation. A lot of small medical only claims could become an issue with underwriting in which they are waiting for the large claim to happen. If your business has a history of small frequent claims you may want to consider a medical deductible or some formal risk management and safety program.
When you have a medical and indemnity claim, the weight of the claim will be 100%. It will roll on and carry a lot of weight in terms of your workers’ compensation mod. This mod is used as one key factor for your premium rates on your workers’ compensation policy.
MEDICAL ONLY CLAIMS
Someone who has to see a doctor due to an incident and is able to return to work and will not lose time. In these cases, they will not have a permanent disability. These claims cost the provider less, and in turn, have a lesser impact on your future rates.
MEDICAL AND INDEMNITY CLAIMS
In addition to medical bills, the employee will be missing work. In these cases, the insurance company will have to pay for lost time, or they might have a disability such as loss of use of a hand. When their body is not what it was before the claim there is a rating factor that determines the amount of compensation for these types of claims.
HOW TO REDUCE THE IMPACT OF CLAIMS?
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 impact that claims have on your policy.
WRITTEN RETURN TO WORK OFFER
Have a return to work plan 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 will no longer receive indemnity payments from the insurance provider.
LOOK FOR FRAUDULENT CLAIMS
It is estimated that fraudulent claims cost policy providers and businesses like you 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.
If you would like a quote or to visit about how DirectWorkComp can help your business please reach out to us at 888-399-1190 or drop us a note at [email protected].
