A couple of recurring questions among employers are:
What workplace injuries/accidents/incidents should I report to my workers’ compensation insurance company?
When should I report them?
The short answers:
All of them
Prompt reporting reduces an employer’s workers’ compensation claim exposure, decreases the ultimate cost of the claim, and allows the claims professionals to guide the insured and employee through the process.
Employer best practices support the injured employee’s claim be documented and written workers’ compensation rights be provided to the employee within 24 hours of learning about the incident from the employee.
A completed “First Report of Illness or Injury” form should be provided to the insurer/insurance company by the employer as soon as possible.
In cases where the employer is not sure whether the injured worker will need medical care, a First Report of Injury for “notification only,” conveys the incident and allows the claims professionals to manage the claim should circumstances change or escalate.
Employers should have clearly documented policies supporting timely reporting that are effectively communicated to all throughout the organization. Valuable procedures include:
- encouraging workers to report incidents;
- supplying claim forms directly to employees;
- obtaining written statements from the injured worker;
- securing statements from co-workers and/or eyewitnesses;
- taking photographs of the workplace where alleged injuries/incidents occurred;
- providing a referral to the injured worker for medical care; and
- maintaining regular communication with the injured worker throughout the claim process.
That said, what are an employer’s responsibilities for reporting workers’ compensation?
What Employers Should Report For Workers’ Compensation
Whether an incident draws blood or an employee has no visible wounds and seems to be “fine,” employers should report every work-related injury to their workers’ compensation insurance company.
Seemingly minor injuries may develop into significant claims.
Acknowledging an incident with your employee, letting the insurance company know about it, and helping the injured worker obtain medical treatment are key to the best possible outcome of any claim.
If an employee suggests s/he has become sick because they were at work, it’s important to follow the same procedures as for injuries.
While it’s easy in the moment to say, “’X” is not a covered workplace illness, an employer may never be 100% certain that the employee’s condition was not related to their job and/or covered under their state’s workers’ compensation laws.
This has become evident in recent months as related to COVID-19.
In some states, the virus is strictly not covered as a work-related illness.
Other states recognize it is a hazard unique to certain workers and thus, is covered for those employed in specific industries.
Some state workers’ compensation laws put the responsibility of proof on the employee that s/he contracted a covered illness in the workplace, while other states support an illness is work-related because it may have been contracted at work.
These variables reinforce the need for claims professionals to be on the case as soon as possible after an employee has articulated s/he believes an illness was contracted due to being at work.
Sometimes, there are workplace incidents where third parties are responsible for the injury of an employee.
While it sounds reasonable for an employer or employee to manage these directly with the third party, state laws dictate that the employer’s workers’ compensation insurance is the primary coverage.
For example, an office worker is traveling to the post office to pick up the day’s mail for his employer when he is hit by another vehicle from behind.
Initially, the employee feels fine and returns to the office
However, the following morning he complains of a severe headache, neck pain, and has a significant bruise on his forehead.
Since the injuries were caused by an at fault third party, the employer advises the employee to contact the other driver’s insurance company.
This is not proper according to most state workers’ compensation laws.
Instead, medical treatment of the injured worker and subsequent lost wages are the responsibility of the employer.
The employer must report the accident to their workers’ compensation insurance company.
Upon notification by the employer—and as part of the claims process—an ensuing investigation by the workers’ compensation insurance company confirms the third party was at fault.
The employer’s workers’ compensation insurance must respond and manage payment of the claim retaining the right to subrogate against the at-fault party (the right seek reimbursement for payments/expenses of the claim from the other party).
When Employers Should Report Workers’ Compensation Claims
Claims professionals can tell countless stories of claims gone wrong because an employer did not report a workplace incident quickly.
Whether an employer purposefully waited, experienced an oversight in reporting, or had a process in place that didn’t support prompt reporting, they all created issues with the claims process that typically increased the employer’s cost of the claim.
According to a 2000 study by the Hartford Financial Services Group, Inc., there was a direct impact of the cost of a claim based on timing of the report from the injured worker to the employer to the insurance carrier.
In general, their experience revealed the average cost of a workers’ compensation claim increased correspondingly to the increase in time it took to report the claim.
In 2015, The National Council on Compensation Insurance (NCCI) released results of their own study based on data provided from 44 states.
According to NCCI, median costs of claims involving lost time from work were about 35% more when reported in Week 3 as those reported in the first two weeks after an incident.
The median cost increased another 12% for claims reported in Week 4.
There may also be contractual obligations within an employer’s workers’ compensation policy dictating report timing requirements.
State laws and regulations also prescribe an employer’s duty and timing of reporting work-related instances.
Laws vary, and in some cases an employer may be subjected to fines and/or penalties for late reporting.
Besides contractual and regulatory reasons, there are other threats to an employer when claims are delayed.
- The carrier’s ability to defend the employer may be diminished when a claim is reported late; the ability to investigate, determine compensability, identify potentially fraudulent claims, and gather evidence including witness statements are incumbered.
- Without quick contact and/or feedback from an employer or claims professional, employees are more likely to engage an attorney. Statistics support claims with attorney involvement cost more than those managed and settled directly with the injured worker. The higher costs are not because the worker who engages an attorney gets more money from the claim, but once an attorney has been retained claims professionals are prohibited from working directly with the injured worker and often must engage and pay other legal professionals on behalf of the employer.
- Workplace morale may be negatively affected as co-workers find out there has not been prompt attention to an injury or alleged incident of one of their peers. Team-player employees may feel let down and lose trust in their employer and a rippling effect may be poorer attendance, production, or other behavior that effects the bottom line.
An employer should notify the workers’ compensation insurance company of injuries or illnesses if the individual(s):
- Is/are your employee(s), and
- Were hurt while working/doing their job, and/or
- Became ill because of their work.
An employer should file a workers’ compensation claim:
- As soon as an employee states s/he was hurt at work or became ill because of their job;
- Immediately to avoid state regulatory fines and penalties associated with late reporting;
- Promptly to help manage costs (late reporting correlates to higher ultimate claims costs); and
- Even in cases where no medical treatment is obtained (as a “report or notification only”).
Reporting known and potential workers’ compensation claims immediately will save an employer money in the end.
If you have questions about when and what claims to report, contact an AIA professional. We’re ready and willing to help you find the answers you need.