The Fundamentals of Work Comp: What Makes Your List?

Editor's note: In today's blog, Tim has a "baker's half dozen" of ideas for you. "Baker" reminds me of homemade rolls and cookies, which in turn reminds me of the rapidly approaching holidays. This is our last blog for 2008. We’ll be taking a break for the next couple of weeks, but we'll be back in the new year with more ideas to inspire work comp cost and productivity improvements. We are grateful for your readership, comments and emails and wish you and yours every blessing of the season. - Kory Wells

I am an avid goal setter. Each year in December I spend a lot of time setting specific goals for the coming year. This year, I decided to invest some time in viewing about 24 hours of material from Jim Rohn called Jim Rohn’s Weekend Leadership Event. I would strongly recommend this DVD set (and, no, Mr. Rohn doesn’t know me from a hole in the wall and I get no incentive for recommending his material).

In what I'd call a corollary to the 80-20 rule, Mr. Rohn suggests that about a half dozen facts and ideas will make 80% of the difference in any area you study. So what are those half dozen things in workers comp?

I love the way Mr. Rohn presents complex concepts in a straightforward manner. Each word he uses is carefully chosen, and the message is always precisely on target. Today, I was listening to him discuss “fundamentals.” In what I'd call a corollary to the 80-20 rule, Mr. Rohn suggests that about a half dozen facts and ideas will make 80% of the difference in any area you study. If someone says, “Let me teach you the 50 fundamentals” you need to be concerned, he believes. This concept challenged me to wonder: what are the half dozen fundamentals of controlling workers comp costs for a typical employer?

I’ve developed the following list and provide these without explanation and in no particular order. I invite you to comment, or even to suggest I’m wrong (nicely, of course):

#1 – Have robust hiring practices that include the use of a conditional offer of employment and a robust medical screening that does not let 100% of the people through.

#2 – Actively measure and intentionally improve the safety culture of the workplace.

#3 – Have a well-trained injury management coordinator with clear authority and responsibility to oversee the rapid recovery and return-to-work of any injured employees.

#4 – Train supervisors to understand the importance of their relationships with employees and to optimally manage the post-injury supervisor / employee relationship.

#5 – Have a robust return-to-work program that ALL employees are aware of (there is some hidden psychology here) that gets employees back to work before indemnity payments start - a big benefit in ERA states!

#6 – Establish and nurture a working partnership with a medical clinic that will ensure effective medical screenings and, in the case of an injury, the right treatment plan that will lead to the most rapid return to work possible.

#7 – (I’m going for a baker’s half dozen here.) Work with a WorkCompEdge Member Agency that is like-minded about these fundamentals and can help you implement needed business changes.

Are these the principles that would make your list? Perhaps more importantly, do you even have such a list? And how do you get motivated to make a list - and then do something with it? This is a dicussion we'll continue in the new year!

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Fitting the Pieces Together: Extraterritorial Issues in Work Comp

In America, we have a Uniform Plumbing Code to protect the health of the nation (not to mention the sanity of plumbers and builders) and a Uniform Commercial Code enacted in all 50 states for a standard method of dealing with business law questions involving commerce. Unfortunately, no such code exists for our nation’s employers and employees for the purposes of work comp.

Knowing how the pieces fit together is especially challenging in work comp due to the lack of a national standard.

As states passed work comp laws starting in the early 1900s, each state established its unique work comp system. This resulted in a mishmash of laws, benefits, compensability and eligibility from state to state. There are many different, non-uniform work comp laws in the United States (state, territorial and federal). The state and territorial laws, which exist in every state, Puerto Rico and the U. S. Virgin Islands, are especially non-uniform in terms of which kinds of employments are covered, dollar amounts of wage benefits payable for different kinds and degrees of disability.

The complexity of our varied work comp system presents challenges for employers in three key areas:

• Establishing proper coverage in jurisdictions in which the employer has operations or other jurisdictions the employer has employees working, living or traveling in


• Understanding what jurisdiction benefits the employee can collect


• Determining what rates (premiums) will apply. (This subject mirrors in its complexity the coverage and benefit structures of the various state and federal laws. We will briefly discuss pricing and only as it relates to extraterritorial issues).

A full article addressing these areas in detail is available to WorkCompEdge members here on our wiki in pdf format.

The hodgepodge evolution of work comp laws has resulted in uneven or nonexistent uniformity across state jurisdictions, which creates challenges for employers when confronting extraterritorial issues, including questions of coverage, benefits and pricing.

Work comp coverage in various jurisdictions may depend on where workers reside, employer operations sites, licensing, and the willingness or reluctance of carriers to accept “broad” language in the work comp policy.

On the Information Page of a work comp policy, the insurance agent for the employer must have the insurance carrier list the states the employer operates in or expects to operate in at the inception of the policy. In a separate section, states are listed where an employer expects it may have employees working but the work in those states will begin after the effective date or renewal date of the policy (with some exceptions). The policy requires that the policyholder (employer) must notify the insurance company at once if the employer begins any work in any state listed in this section. Broad wording (suggested in the full article on this topic) is recommended to assure coverage in most jurisdictions even in unforeseen circumstances.

When a state is listed on the work comp policy, essentially we have attached hundreds of pages of work comp statutes and laws and thousands of pages of case law for that state. Add multiple states and I would argue that, although the basic policy is only about six pages long, the addition of statutes and case law make the work comp policy the largest and most complex policy an employer buys.

Employees working, living, traveling in or through other jurisdictions frequently present special work comp challenges including state specific time limits, variations in benefits, state law, reciprocity agreements and other issues.

To compound the challenges, work comp pricing is often driven by pressure to minimize work comp costs. This presents risks to employers as carriers may deny claims or charge some or all of a claim back to an employer. Errors in extraterritorial issues can result in devastating financial consequences to employers.

Knowing how the pieces of work comp policy and law fit together is especially challenging due to the lack of a national standard. For agents and employers, it is critical to understand each state’s work comp laws, customs and practices and, in doing so, to secure the broadest coverage possible. They also need to understand that any claim can result in a dispute as to which benefits apply as well as other extraterritorial issues. In these cases, it is best to work through these issues constructively with employees rather than engage in a standoff.

If you're a WorkCompEdge member, I hope you'll refer to the full article on our wiki for much more depth on the subject of extraterritorial issues.

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Rock on with our videos: Getting Started with WorkCompEdge

(Part 3 of the Series "Getting Started with WorkCompEdge")

Okay - because you're a dedicated reader, you already know to use the Getting Started with WorkCompEdge survey and the WorkCompEdge proposal report in ModMaster to help your company or client decide which work comp issues - and WorkCompEdge modules, if you're a member - your company should focus on first.

We admit - our training videos may not bequite as exciting as a rock concert. But they're another way we can help you rock with WorkCompEdge! Visit our training videos now

So you've utilized the survey and/or the report, identified the topic(s) which most need your attention, and now you're chomping at the bit, as we say in this part of the country, to get started with a specific module in WorkCompEdge. (Or, if you're still not a WorkCompEdge user, you're curious to see what you would do next.) But how do you know what to do within the module? And how do you know that you're not overlooking some wonderful features we envisioned and painstakingly labored to include on the site? If you're asking such questions, then you're ready for

Step 3 - Watch our introductory videos

As you've hopefully noticed by now, there are videos all over WorkCompEdge. Our spokesperson Holly starts talking as soon as you hit the site, and each of the 15 modules has its own vignette which illustrates the concepts of that module. But for this step, I'm talking about a couple of different videos, both narrated by the one, the only, the legendary Tim Coomer, our CEO.

When you have 9 minutes, watch the Introduction to WorkCompEdge video for an overview of the site's navigation, module components, goals and more.

When you have 90 minutes, watch the WorkCompEdge Quick Tour. Yes, we realize that a 90 minute quick tour is a bit of a misnomer. But what can we do? Tim's the boss. At this very moment, for example, he's blasting circa 1987 Guns N' Roses from his corner office and there's not a thing any of us can do about it. So, he calls this video a quick tour, we all call it a quick tour. Seriously, as you might expect, this video goes much more in-depth and includes an overview of each of the 15 modules.

If you don't have many minutes at all, you can still view these videos a segment at a time. They both have menu options so you can click to the parts that interest you most - or watch a little while, then come back and click in to where you left off.

Finally, this is a good time for me to mention that there are other videos to help you with specific workbooks associated with several of the modules in WorkCompEdge. Don't miss them on the WorkCompEdge WebHelp page at www.specificsoftware.com/wcehelp/. All these videos are another way we can help you rock with WorkCompEdge.

More in this series "Getting Started with WorkCompEdge: Part 1 Part 2

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