The Lifecycle of a Workers’ Comp Claim, Explained
Workplace injuries are something that every employer seeks to prevent. However, accidents happen, and some industries have a naturally higher chance of injury than most. Whether you run an office, a warehouse, a manufacturing plant, or a field service business, properly managing workers' compensation claims is the key to ensuring that those benefits are available when needed while remaining in control of rates and premiums.
Understanding the Workers’ Comp Lifecycle
Claims management is the process of properly guiding injured workers through the lifecycle of a workers' compensation claim, ensuring that each claim is given the appropriate amount of attention and care. This can both eliminate false or inflated claims and take the best possible care of injured employees.
Skillful, or proactive claims management, therefore, begins with a deep understanding of the workers’ comp lifecycle. We will examine every step of the process, including the roles in a workers’ comp claim and the impact of both effective and ineffective claims management.
1. The Injury Occurs
The first stage of any workers' compensation claim is the injury. This could be a slip-and-fall, a mishap with workplace equipment, exposure to a hazardous chemical, a muscle spasm while lifting, or any number of other possibilities. A workplace injury is any injury or medical harm that occurs while an employee is on the job, on company premises, or executing professional duties.
2. Immediate Medical Attention
In most cases, the employee will need to seek immediate medical attention. The severity and nature of the injury will determine what type of medical attention is needed. Initial treatment may include a few items from the nearby first aid kit, a visit to the company clinic, or an immediate ambulance ride to the hospital. The employee's safety and injury treatment always comes first.
3. Report of Injury
Once the employee's injury is safely treated, the injured employee will file an injury report. The report should be completed as soon as possible. Each state may indicate a specific timeframe in which the report must be completed to be eligible to file for workers' compensation. The shortest range is 3 days in Wyoming, and the longest is 2 years in New Hampshire. However, it's best to get the report in ASAP.
The employer must complete the First Report of Injury or Occupational Illness (FROI) form. This should be available ahead of time, with instructions for managers to guide them through these initial steps. The employee must also file a report. While the law does not always require a written report, it's best to have a written report from both employer and employee on record. Collecting immediate witness statements can also be helpful but is not necessary.
4. Employer's Notification to Insurance
Once the injury reporting is complete, the employer is obligated to submit the FROI report to their workers' compensation insurance carrier within a period determined by the state. For multi-state employers, it's important to know that your FROI filing deadline is determined by the state where the injury occurred.
5. Seek Medical Treatment
After initial medical attention, the employee should also seek more considerable medical treatment for the injury. The injured employee will see a doctor. Depending on the jurisdiction and specific insurance policies, this might be a doctor from a list provided by the employer, the insurance company, or the employee's own choice.
The doctor will help the employee get a clear view of the severity of their injury, including potential disability status and recovery time. The doctor will form a treatment plan and assist in estimating expenses for that recovery, which may or may not be covered by the employee's existing medical insurance.
6. Claim Submission
With the doctor's assessment ready, the employer or insurance carrier will submit a claim to the state workers' compensation board or agency. This claim will include details regarding the initial injury, response to the injury, the severity of the injury, and the employee's recovery plan.
7. Claim Investigation
Once the claim is submitted, the insurance company will investigate the claim. This may involve reviewing the circumstances of the injury, checking medical records, and possibly seeking a second medical opinion. The insurance carrier may also assess working conditions, including on-site safety, contributing factors, and security tapes to ensure that the injury was, indeed, job-related.
8. Claim Approval or Denial
The results of the investigation will lead the insurance company to either approve or deny the workers' compensation claim. If the injury was legitimately job-related and accurately reported by the employee and doctors, the claim will be approved. At this point, the insurance company will determine the correct settlement amount and begin paying benefits to the injured employee.
If the claim is denied, the employee has the right to appeal the decision and submit further evidence in their favor. The employee may also appeal a settlement offer if they believe the amount is too low or they qualify for further disability benefits.
9. Benefits Disbursement
Once approved, the injured worker will receive workers' compensation benefits. These benefits may include more than just cash. The worker may also have access to specific medical care coverage and rehabilitation services, as well as a portion of wages lost to recovery or temporary disability. Non-monetary benefits focused on recovery are a useful way to ensure the employee gets the help they need and minimize the temptation of others to fabricate or inflate severe injuries.
10. Return to Work
Ideally, injured workers will be able to recover and return to their previous jobs. Of course, not all injuries allow for this. Depending on the severity of the injury, workers may be placed in a modified or alternative role, or they might not be able to return to work at all. Some workers' compensation programs also include vocational rehabilitation support to help those who can't return to their former jobs train new job skills. For example, a warehouse worker who is now in a wheelchair may be trained in technical skills so they can help manage logistics from a desk after the injury.
11. Case Closure
Once the injured employee has recovered sufficiently and/or all benefits are settled, the workers' compensation case is closed. The employer and insurance company can return to business as usual, while the worker's future is determined by the recovery or aftermath of their injury.
12. Potential Appeals and Hearings
Lastly, if there are any disagreements, the case may go through various appeal processes or hearings to resolve the problems. Examples of issues include denied claims, a settlement offer that does not meet the injured employee's needs, or benefits that do not match the settlement. Appeals can extend the workers' compensation lifecycle, but most cases are concluded and closed.
Effective Workers' Compensation Lifecycle Management
Throughout the workers’ compensation lifecycle, it's essential for all parties to maintain open communication and to document everything. This can help resolve issues quickly and ensure that the injured worker receives the benefits to which they are entitled. Employees and managers should be encouraged to report injuries immediately and accurately, then follow the procedure as designed so that injured employees receive the care they need in the most efficient manner and any unnecessary claims are avoided or quickly declined.
Professional workers' compensation Management Services with Alloy Employer Services
If your business is seeking a solution to more efficient and accurate workers' compensation, Alloy Employer Services can help. Try a free analysis of your company's Workers' Compensation program, including rates and claims management performance, with zero commitment. Contact us for your free claims assessment today.
