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Workers' Compensation

For more information on establishing a negotiated workers compensation program, call the Midwest Region Laborers’ Health & Safety Fund at (800) 218-2253.

NEGOTIATED WORKERS' COMPENSATION - A "WIN-WIN" PROGRAM
workers compTo ensure that every worker is compensated for on-the-job injuries, workers’ compensation insurance is federally-mandated for every employer. However, across the U.S., due to rising health care costs and increased litigation, workers’ compensation premiums are soaring. This rising cost has a big effect on a company's ability to compete. Negotiated workers' compensation programs (NWCP) can help control these escalating costs.

“All sides start with a win-win premise,” says LIUNA Vice President and Midwest Regional Manager John F. Penn. “We negotiate everything else. We should also negotiate workers’ compensation initiatives that operate within the framework of existing state law by complementing the established state program, not replacing it.”

Frequently, in situations without a NWCP, when a worker is injured, a lawyer is hired, and the two sides wrangle until a settlement is reached or a line is drawn. If necessary, the state’s workers’ compensation board decides a just award. Either way, the process is long and some of the award goes to the lawyers.

The most significant mechanism in a NWCP is the advocate, who immediately contacts an injured worker to help with the often complex and protracted compensation process. If a dispute between a worker and the company develops, the advocate attempts to work it out. If facilitation cannot resolve the problem, the NWCP provides for mediation and, sometimes, voluntary arbitration. If all these options fail, the worker may appeal to the state workers’ compensation board.

NWCPs also save money and improve efficiencies by designating health care providers – agreed to by labor and management – that are familiar with workplace injuries and have prices within the mainstream of the local health care market. Another advantage of NWCPs are the return-to-work programs that bring workers back quicker, minimizing compensation loss for workers and lost workdays for employers.

Strategically, the most important advantage of NWCPs may be their establishment of joint labor-management safety committees that identify worksite hazards and adopt procedures and training to minimize their risks.

Learn more about workers' compensation by visiting www.workerscompensation.com.

For more information on establishing a negotiated workers compensation program, call the Midwest Region Laborers’ Health & Safety Fund at (800) 218-2253. 

Additional Programs and Information

EMR

Many owners now require companies to have Experience Modification Ratings (EMRs) below one (the industry-wide average) in order to bid work. The EMR is based on actual claims paid by a company's insurer. The best way for a contractor to reduce its EMR is to prevent injuries that are costly, such as sprain and strain (e.g. back) injuries which make up about 40 percent of lost workday and direct medical costs. The Midwest Region Laborers' Health and Safety Fund has a number of programs to help contractors improve their safety programs, reduce injuries on the job, lower their EMR and, thus, reduce their premiums. Also, many insurance companies offer loss control services.

EMR is calculated on a rolling, three-year average, however, so the benefits of an improved company safety program are fully realized only after three years of effort.

 

DISCOUNTS

Several states or insurers offer discounts to employers that institute specific programs such as drug free workplace programs, health and safety committees or fall prevention programs. These vary from state to state and by insurer.

 

RETURN TO WORK

Normally, a small percent of cases account for a large fraction of workers' compensation costs. For these cases, good management and effective return-to-work programs can cut costs dramatically. Generally, workers should be back at work as soon as medically possible. Having good medical advice about workers' limitations and putting them back to work at modified duty jobs accelerates recovery and reduces loss.

 

ADR

Through collective bargaining in states that allow for it, LIUNA and signatory contractors can set up alternative dispute resolution (ADR) programs under which workers are assigned an ombudsman, use prescribed medical facilities and receive their compensation in a more timely manner. In exchange for this more focused attention to their members' claims, the union agrees to arbitrate disputes, litigation is curtailed and legal costs are saved.

Some states explicitly authorize ADR in their workers' compensation statutes (CA, MA, NY, ME, MD, PA, Fl, MN, KY and, to a lesser extent, CO, OR and HI). In others (GA, CT, RI and MO) it is possible to design a system, but workers cannot be required to use it. In Illinois, a medical network can be established through collective bargaining.

 

HIGH DEDUCTIBLE POLICIES

As with most insurance policies, workers' compensation premiums will decrease if the deductible is increased. Some companies have taken out primarily catastrophic policies with $1 million deductibles and pay out-of-pocket for all smaller costs. As a result, their safety program pays attention to small details and tries to prevent even minor injuries. These companies tend to have very good safety programs.

 

INSURANCE GROUPS

Some larger, creative contractors have formed insurance groups to pool their resources and get a better deal from the insurance companies. They have regular meetings to work with each other on their safety programs. As a result, they have very good safety records and lower rates. Similarly, many contractor associations have group rates for those members that insure with a selected company.

 

FRAUD

Task forces on fraud have found that the most common fraud is employer misclassification of employees into lower risk classifications. Working with the state to crack down on misclassification fraud will help level the playing field for union contractors and lower rates for everyone.

While attention is often paid to employee fraud, the problem is relatively small by comparison and can be addressed by having independent medical examinations or reviews. This also will help check medical claims fraud by doctors.

 

HELP

For help in assessing and implementing workers’ compensation cost containment efforts contact the Midwest Region Laborers' Health & Safety Fund at (800) 218-2253.