FAQs About Claims

FAQs About Workers’ Compensation Claims

1. If an employee violates a safety rule, are they covered by workers’ compensation?

Yes. Even if an employee is injured while violating a work rule, they are usually covered by workers’ compensation insurance. Ignorance or bad judgment alone will not usually lead to a denial of benefits. Repeated violations of safety rules, however, may lead to a reduction of indemnity benefits if the employer is able to show that the employee had been disciplined in the past and there is documentation to this effect. Advise your FHM Claims Adjuster, if this is the case, when the claim is reported.  This may help to effectively reduce the ultimate cost of the claim. You also may want to ask your FHM Loss Control Consultant to help with setting up safety programs and training.

2. If an employee is injured at a company-sponsored picnic, are they eligible for workers’ compensation?

If attendance is mandatory, the picnic is held during business hours and the employer derives a benefit from it beyond improved employee health and morale, then the employer will more than likely be responsible for any injuries that may arise. To prevent extracurricular activities like this from boosting your workers’ compensation costs, try implementing these strategies:

  • Make attendance optional. If not, you run the risk of making it a condition of employment and increasing your liability if someone gets hurt.
  • Don’t demand that workers help with set-up and serving. Ask for volunteers. A “special job task” (one that is “concurrent” to the job even though it’s off-hours) may also increase your workers’ compensation liability.
  • Ban contact sports. Choose games and activities which don’t significantly increase the risk of employee injury. And let employees organize the games and provide their own equipment. The more out of the loop you are, the less likely the company will be held liable for any resulting injuries.
  • Limit alcohol consumption. Or better yet, ban it altogether. If you want to allow some drinking, try limiting employees by using drink tickets or curtailing the amount of time in which alcohol is served.

3. Can employees collect workers’ compensation benefits for injuries sustained while they are off company premises?

While workers’ compensation laws are state-specific, most follow the basic rule that injuries that occur “in the course of” and “arise out of” the worker’s employment are covered.

For an injury to be considered as having occurred in the course of employment, the employee must have sustained it while performing work or engaging in an activity that is logically related or incidental to the employer’s business.

In order to make the connection that an injury arose out of employment, test these three factors:

  • The proximity of the scene where the employee was injured to their place of work;
  • The amount of control the employer has over the scene of the injury; and
  • Any benefits the employer may have received from the employee’s presence at the scene of the injury.

Your state workers’ compensation law may also have a special hazards rule. In general, an employee can collect if they can prove that the employment relationship exposed them to a greater risk than that faced by the general public.

4. What is an employer’s responsibility if an employee cannot physically perform the job they were hired to do upon their return from workers’ compensation leave?

Workers’ compensation statutes vary from state to state regarding whether or not you must restore employees to their original jobs upon their return from workers’ compensation leave. Some workers’ compensation laws require that the employee be reinstated to a part-time or a transitional-duty job which meets the restrictions given by their treating physician until they can resume working in their old position. So it’s best to check with your state’s particular workers’ compensation law.

However, the workers’ compensation law may not be your only concern. If this employee’s injury qualifies as a disability or serious health condition, you may also have to contend with the Americans with Disabilities Act (ADA) and/or the Family and Medical Leave Act (FMLA).

According to the ADA, you have a responsibility to accommodate an employee with a disability who is returning from leave if an accommodation is available that would enable the employee to perform the essential functions of the job. Reassignment to another position may be considered an accommodation if the employee with a disability can no longer perform the essential functions of their original job.

The FMLA, on the other hand, guarantees job protection. Thus, employees returning from workers’ compensation leave, who also took concurrent FMLA leave, are entitled to their former (or equivalent) positions. However, the FMLA stipulates that if an employee is unable to perform an essential function of the same or an equivalent position because of a physical or mental condition, you aren’t required to reinstate them into another job.

Be sure to check with the ADA and FMLA web sites to see if you are subject to their requirements.

5. What are some measures employers can take to minimize workers’ compensation fraud?

Workers’ compensation fraud is definitely a major problem for today’s employers. Unfortunately, it isn’t always as obvious as, for example, an individual who claims to have been injured at work on a day that records show they were out sick.

One way to help fight fraud in your workplace is to screen job applicants carefully. It’s illegal to ask applicants about workers’ compensation claims or to refuse to hire someone because they have filed workers’ compensation claims in the past. But analyzing worker’s compensation records after a tentative job offer has been made can tell you about an applicant’s ability to handle physically demanding jobs or for determining specific ailments that may keep the person from performing a job successfully.

Another way to fight fraud is to hire an outside investigator to check out cases of possible fraud. Make sure the information you give the investigator is complete. Allow co-workers to be interviewed, turn over any documentation and provide a photo of the employee, if outside surveillance is required.

A third way to prevent fraud is to be aware of and watch for “red flags” of fraud, including inconsistency in medical records; injuries that take much longer to heal than predicted by a doctor; missed doctor appointments; or that the employee can’t be reached by phone during their normal working hours. But remember, these are just warning signs; they do not automatically indicate workers’ compensation fraud. So be sure to investigate carefully.

FHM’s web site has information on effective hiring practices including web sites that can be used for background screening.

 

View FHM Insurance Company's profile on LinkedIn