How a Return to Work Program Can Save You Money on your Workers' Compensation Premium

How a Return to Work Program Can Save You Money on your Workers' Compensation Premium  

A return to work program can help get your employees back to work sooner, but did you know it can also save you money on your Workers' Compensation Premium? Studies have shown that organizations that implement a return to work program can save an average of $2,329 per workers' compensation claim. Watch this short video to find out how you can take advantage of these cost savings by getting your employees back to work sooner and managing your Experience Mod. 

 

 

Please call if you need help setting up a Return to Work Program or if you have any questions.

Dan Zeiler

dan@zeiler.com

708.597.5900 x134 

 

 

 

 

 

0 Comments »

"Workers' Compensation costs are too high." - Illinois Gov. Bruce Rauner

Illinois Gov. Bruce Rauner on Thursday began laying out priorities for his first year in office, saying property taxes and workers’ compensation costs are too high, Medicaid spending is unsustainable and state workers’ salaries and benefits are too generous.

In a speech he said was a preview of the State of the State address he’ll give next month, the Winnetka Republican said Illinois is in “massive deterioration mode.”

He said he will propose a number of reforms to turn the state around, and indicated they would involve making Illinois more attractive to businesses while slashing spending on everything from health insurance for the poor to public-worker pensions and the state’s payroll. 

“This is the critical lesson that we’re seeing: We’re on an unsustainable path,” Rauner told students at the University of Chicago Booth School of Business. “We need fundamental structural change and raising taxes alone … isn’t going to fix the problem, and in a lot of ways it’s going to make it worse.”

While he didn’t outline specific proposals, many of Rauner’s ideas are likely to draw heavy opposition from majority Democrats and even some fellow Republicans in the General Assembly, as well as public-employee labor unions.

He said higher-than-average costs of workers’ compensation and unemployment insurance are driving businesses out of the state, property taxes are “brutally high” and “shenanigans” in the public-employee pension system have made Illinois’ multibillion-dollar pension debt “a time bomb for taxpayers.”

Rauner said public employees’ average salaries are among the highest of any state in the U.S. and the state’s share of health care premiums is too high. Anders Lindall, spokesman for the American Federation of State, County Municipal Employees Council 31, said Rauner was using numbers that are inaccurate and in some cases outdated. He said public union employees are not the cause of the state’s challenges.

AFSCME, the state’s largest public-employee union, is set to begin negotiations with Rauner’s administration on a new contract. “The type of misleading statement and false facts we see today are not an encouraging first step you want to see from someone who is truly trying to work together for the common good,” Lindall said. 

Rikeesha Phelon, spokeswoman for Senate President John Cullerton, said the Chicago Democrat wants to see how Rauner’s statements translate into legislative policy and a proposed budget. Rauner is scheduled to deliver his budget address on Feb. 18, two weeks after his State of the State.

But Cullerton clearly wasn’t pleased after Rauner ripped legislators in his inaugural speech for leading Illinois into a budget disaster, saying afterward that many of the new governor’s comments were inaccurate and that he “is going to have to learn about state government.”

Rauner on Thursday also named new members of what he’s calling his “Turnaround Team” — people he said have experience in budgeting and management. They include former Hawaii Gov. Linda Lingle, a Republican who will serve as senior adviser. - See more at: http://thez.zeiler.com/workers-compensation-costs-are-too-high-illinois-gov-bruce-rauner#sthash.gpILWH1h.dpuf

 

Dan Zeiler

dan@zeiler.com

708.597.5900 x134

www.zeiler.com

Source: http://chicago.cbslocal.com/2015/01/23/rauner-previews-1st-year-priorities-cut-taxes-medicaid/

0 Comments »

Illinois DOI Announces 2 Convictions Resulting from its Workers’ Comp Fraud Investigations

Illinois Department of Insurance (DOI) Director Andrew Boron today announced investigations by the Department’s Workers’ Compensation Fraud Unit have resulted in two convictions.  A former Crystal Lake police officer charged with workers’ compensation fraud in McHenry County and a former business owner charged with forgery in Cook County have both been convicted and sentenced.

“As I have said before, we take accusations of fraud very seriously.  These convictions are a direct result of our investigations and should send a clear message that workers’ compensation fraud will not be tolerated in Illinois,” said DOI Director Boron. 

The Crystal Lake felon, a former police officer for Crystal Lake, was sentenced to one year of probation, ordered to pay $9,588.13 in restitution, and required to pay $730 in fines, fees, and court costs.  He pleaded guilty in October to workers’ compensation fraud. He made statements to create the impression the nature and extent of an injury he claimed to have suffered to his wrist while at work was more extensive than it really was.  Video surveillance showed him lifting weights in the police station in the month following the injury while he was assigned to light duty.  Additional video surveillance showed him not only lifting weights, but working as a personal trainer. He filed a case with the Illinois Workers’ Compensation Commission for his wrist injury in October of 2012, but that case was voluntarily dismissed less than a month later, after DOI’s investigator sought to interview him.

The second fellon from Cook County was sentenced to two years of probation.  As part of his probation, he was ordered to complete drug treatment.  He pleaded guilty to forgery in November. He lacked workers’ compensation insurance after his policy was cancelled for non-payment of premium in 2008 then issued false Certificates of Insurance to a general contractor he performed work for as proof of workers’ compensation insurance.  The general contractor, who relied on the Certificates of Insurance provided, was assessed thousands of dollars in additional premium by his own insurance company to cover the uninsured risk. 

Fraud based upon the issuance of false Certificates of Insurance puts employees and companies such as general contractors at risk, yet it is one of the easiest forms of fraud to detect and prevent.  If there is any question as to the authenticity of the documentation being provided regarding workers’ compensation coverage, the certificate holder should contact the insurance company listed on the certificate directly to verify that a policy is in fact in place. 

Dan Zeiler

dan@zeiler.com

708.597.5900 x134

- Provided by WorkersCompensation.com

0 Comments »

2015 Illinois Workers Compensation Rates

I have had many inquiries into the 2015 Illinois Workers Compensation Rates. If anyone has interest send me an email with the Workers Compensation Class Code in question and I will forward the detail.  If you don't know your class code, let me know the type of business you are in and I'd be happy to help.

Dan Zeiler

dan@zeiler.com  

708.597.5900 x134 

- 2015 Illinois Workers Compensation Rates 

0 Comments »

How Are Disability Insurance Policies Taxed?

How are Disability Insurance Policies Taxed?

The general rule for owners and beneficiaries of disability insurance policies is this: If you take a tax deduction for the premiums, then the income from a disability insurance policy is taxable.

For example: If you are the beneficiary of a workplace disability insurance plan, and your employer pays the premiums (and takes a tax deduction for these premiums as an employee compensation business expense), then any income paid to you is taxable as ordinary income.

However, individuals who buy disability income insurance policies generally cannot take a tax deduction for the premiums. Since they do not take a tax deduction, but instead pay their premiums with after-tax dollars, then income benefits paid out to the beneficiary or policy owner are generally tax-free.

The same principle applies if the employer pays a portion of the premiums (taking a business expense deduction) and the employee pays a portion. The employee is not entitled to take a tax deduction on the premiums because the IRS considers the premiums a personal expense to the employee. If the policy pays a benefit, then the employee must pay income tax on a pro rata portion of the benefit. That is, if your employee pays 50 percent of the premium, you must pay income tax on 50 percent of the benefit.

Note: IRS regulations require the calculation to be made based on an average of premium payments going back over three years.

Section 125 (Cafeteria) Plans

If the employer pays a portion of the premium and the employee uses pre-tax dollars to pay for the remainder of the premium then the employee must pay income tax on 100 percent of the benefit. Note that the principle holds throughout - the employee did not pay taxes, in this case, on any of the money used to pay the premiums, and therefore is not entitled to shield the benefit from federal taxes.

In short, if you take a tax benefit on the front end, you have to pay the full income tax bill on the back end - if the plan, in fact, pays benefits.

Owner/Employees of C Corporations

If you are a C corporation owner/employee, you can choose to have your corporation take the tax deduction now or simply own the policy personally. If the corporation pays the premiums, benefits are taxable to the owner/employee.

Sole Proprietors

Like corporation owner/employees, you also have the option of treating premiums as a tax deductible employee compensation expense, or owning the policy personally and paying premiums with after tax dollars. The same basic principle applies as in the above cases, however: If you took a deduction on the premium, benefits are taxable as ordinary income.

Partnerships

Owners of partnerships (partners) are not generally considered to be employees in the same sense that owner/employees of corporations are. The same applies to S corporations that are taxed as partnerships as well as members of limited liability companies. In these cases, while premiums paid to cover employees are deductible (and benefits to these employees are taxable), any costs for insurance for owners gets passed along to their gross income on their personal returns. They don't get to deduct for the premiums, and neither does the partnership. In these cases, benefits are generally income tax-free.

Workers Compensation

Proceeds from workers compensation insurance programs are generally tax-free, if paid under a workers compensation act in your state.

Railroad sick pay under the Railroad Unemployment Insurance Act is generally taxable - unless it is for an injury sustained on the job.

For further information on how disability insurance proceeds are taxed, and see IRS Publication 525 - Taxable and Non-Taxable Income: http://www.irs.gov/publications/p525/ar02.html

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

-Dan Zeiler

dan@zeiler.com

(708) 597-5900  X134

0 Comments »

Do You Need Workers Compensation Insurance?

Do I need workers compensation insurance?

Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.

To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required to buy workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they're hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.

Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitiation services. It also provides death benefits to surviving spouses and dependents.

Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.

Workers compensation insurance must be bought as a separate policy. Although in-home business and businessowners policies (BOPs) are sold as package policies, they don't include coverage for workers' injuries.

www.iii.org

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

-Dan Zeiler

dan@zeiler.com

(708) 597-5900  X134

0 Comments »

A Brief History of Workers Compensation Insurance Programs

Workers Compensation in the Ancient World

Almost as long as workers have been getting injured on the job, we have had some formal or informal system of compensating workers for workplace injuries. Workers compensation claims management and processing is, if not the oldest profession in the world, at least pretty close! The earliest recorded formal and legally-mandated workers compensation scheme in the world dates back to at least the year 2050 B.C., in ancient Sumeria, in what is now Iraq. Stone tablets recovered from the city of Ur - about 9 miles from Nasiriyah - established a set system of payments to injured workers, itemized by injury.

The Code of Hammurabi later adopted the practice, as did the Greeks, Babylonians, Romans, Arabs and even the Chinese.

Into the Modern Age

The Prussians, under Otto von Bismarck, were the first modern nation-states to adopt a formal workers' compensation system following the Industrial Revolution, with the Accident Insurance Bill of 1884. Originally conceived as a measure to prevent Marxist political movements from making inroads into the Prussian/German working classes, the Bismarck program actually contained two important innovations that are at the heart of the American workers compensation system today: First, claims were separated from the tort system, so that workers seeking remedy under workers compensation rule could not sue their employers for damages in the courts. Second, claims were processed under an early version of today's "no fault" provisions. Claims could be paid promptly, because there was no need for a magistrate to assign fault or blame through a detailed fact-finding.

The system worked so well, and was so popular, that the largely German-American population of Wisconsin, in 1911, enacted the first workers compensation insurance program in the United States - modeled closely after the Prussian system.

Development in the U.S.

While the U.S. lagged a few years behind the United Kingdom in adopting workers compensation plans, there was a very limited program created for workers who were directly involved in projects involving interstate commerce, such as railway workers, established in 1908. It was limited only to this population because the sentiment at that time was that programs like workers compensation to everyone else was properly left to the states.

At the grassroots level, however, there was a growing public awareness of the hazards of industrial age employment thanks to populist, muckraking writers such as Upton Sinclair, who highlighted the plight of slaughterhouse workers in his novel, The Jungle. This awareness of the hazards of modern industrial employment in the unforgiving factories, plants led to a number of failed attempts to pass legislation in the state assemblies, early on - first in New York (1898), then Maryland (1902),  Massachusetts (1908) and Montana (1909).

The "Great Tradeoff"

Ultimately, the first state to successfully enact a broad workers compensation was the largely German-American population of Wisconsin - then very much the heart of the American Progressivist movement. Their program was modeled closely after the Prussian system, though only after a long debate between business and labor interests. In the end, they came up with the same "great tradeoff," in the parlance of the time, that was at the heart of the Bismarckian model: Employers agreed to provide substantial wage replacement for injured workers through an insurance system, without any fault-finding requirement that would cause devastating delays in payouts to workers who depended on their wages to survive. In return, labor interests agreed to give up the right to sue their employers for covered claims. This allowed employers relief from the risk of outsized claims and judgments.

Once Wisconsin broke the seal though, other states quickly followed suit: 11 more states passed plans of their own that year, four more in 1912, and eight more in 1913. By 1935, some 45 of the 48 states then existing had passed workers compensation laws of their own, and By 1948, a similar program had been established in all 48 states in existence at that time, as well as the future states of Alaska and Hawaii.

Today, all 50 states have enacted similar legislation, including these provisions:

•A no-fault approach to claims processing - workers don't have to demonstrate that their employer was negligent for benefits to be paid.
•Employers are protected from lawsuits (a tort exemption) over workers compensation issues.
•Employers fund workers compensation benefits by paying premiums, which vary depending the state and the occupation of the covered worker.

Additionally, 45 of the 50 states delegate responsibility for claims administration to special boards. Five states - Wyoming, Tennessee, New Mexico, Alabama and Louisiana, keep the process within the judiciary, though in each case a state agency exists to help with administration and prompt disbursement of funds to injured workers.

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

-Dan Zeiler

dan@zeiler.com

(708) 597-5900  X134

0 Comments »

Five Ways to Avoid OSHA Penalties

Five Ways to Avoid OSHA Penalties

During the first half of October 2014, the U.S. Occupational Safety and Health Administration announced a dozen citations against employers. A New Hampshire roofing contractor was fined $61,600 for not providing adequate fall protection. A Connecticut roofing contractor faces several citations following a fatal accident in July. A metal parts processor in Ohio was cited for 10 serious violations and $64,000 in fines over the accidental death of a supervisor. A cabinet maker in New Jersey faces a six-figure fine for exposing employees to a carcinogenic chemical. The death of an employee on a conveyor belt has a Mississippi lumberyard facing a $75,000 penalty.

Noncompliance with OSHA regulations can cost employers a lot of money. The good news is that complying does not have to be cumbersome or expensive. These procedures and attitudes can help a company keep its name out of an OSHA news release.

Improve record keeping. Good documentation is an employer's first defense against an OSHA inquiry. Information gaps in the OSHA 300 log (the record of work-related injuries and illnesses) may prompt inspectors to conduct comprehensive safety audits of businesses. Filling in missing information for the past three to five years can save your business a lot of grief and expense. Check personnel files and workers' compensation loss records for details of accidents.

Focus on ergonomics. Preventing repetitive motion disorders can help businesses avoid citations and penalties. It also reduces workers' compensation insurance premiums in the long run. Analyze how workers are performing their tasks and look for ways to reduce the strain on their joints, necks and backs.

Fix the routine violations first. Some safety issues are simple and cost little or nothing to correct. For example:
•Blocked exits
•Lack of protective equipment, such as gloves and safety goggles
•Poor housekeeping
•Improper storage of materials such as flammable liquids

These problems can accumulate over time. OSHA has penalized businesses with large numbers of violations like these, so it pays to monitor and correct them.

Have a plan for disasters. The weather has become more volatile, as the tornadoes of recent years and storms like 2012's Superstorm Sandy have shown. Contagions such as the Ebola virus can come seemingly from out of nowhere. Businesses must be ready for the unexpected. Disaster plans should include:
•Training for employees on what to do in the event of an emergency
•Procedures for safe evacuation from the building
•Workplace hygiene
•Stockpiling of emergency supplies such as first-aid kits
•Training for employees on how to administer first aid and CPR
•Arrangements for operating from remote locations
•Communications with employees, their families, customers and vendors

Although OSHA is not concerned with some of these aspects of the plan, having them in place will help the business survive the event.

View safety as a profit driver, not a cost center. Preventing workplace injuries costs money, but it also can improve a business's profitability. Some project owners and general contractors will consider bids only from contractors with workers' compensation experience modifications lower than 1.0. Firms with a reputation for safe operations will attract better workers. Also, insurance does not cover many of the costs from workplace accidents, such as time spent on investigating the incident, reduced employee morale, lost productivity, reporting costs, and the cost of OSHA penalties. Money saved on prevented accidents goes straight to the bottom line.

Some workplace injuries occur despite an employer's best efforts to prevent them. However, reasonable steps to improve workplace safety reduce the frequency and severity of injuries, make the business more competitive, and avoid problems when an OSHA inspector visits. To learn more, speak with us!

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

-Dan Zeiler

danz@zeiler.com

(708) 597-5900  X134

0 Comments »

Employers: Control Your Workers' Comp Costs

Ways Employers Can Control Their Workers' Compensation Costs

The law requires most businesses to carry workers' compensation insurance. This protects employees and employers both, and it gives income to workers in the event they are injured badly enough they require time off of work to heal. For employers, workers' compensation liability insurance gives coverage for any lawsuits that may be filed due to work-related injuries.

 The amount of money employers pay for workers' compensation insurance will vary depending on the industry of work and the company's claim history. For companies where the work is based out of an office, insurance is much less expensive than it would be for more dangerous jobs such as warehouses, trucking companies or factories. Regardless of the industry, there are several ways employers can keep their workers' compensation costs under control. Keep these helpful tips in mind.

Train all new employees thoroughly. According to research, about 30 percent of claims come from accidents that involve new hires. Employers should review their orientation programs to identify weaknesses and areas for improvement. It is better to be too thorough than not thorough enough with these programs.

Keep safety as the top priority. Not incurring claims is the best way to keep costs lower. Employers should build a culture of safety throughout the workplace that engages workers in their efforts. For example, making safety councils where ideas are solicited from workers about how to make the workplace safer is a useful step.

Screen all potential new hires carefully. Make sure the right workers are hired initially by taking advantage of screening options. Researchers say that workers who are substance abusers are much more likely to cause accidents on the job and sustain injuries. Drug screening programs should be essential in every workplace for possible candidates, and background checks that are applicable with state laws can also help in many instances.

Classify all workers correctly. Classification codes are used to identify workers' levels of compensation. When employees are not classified correctly, the employer may find coverage is inadequate. There are fines for wrongly classifying workers and not having enough coverage.

Manage all claims proactively. If an employee sustains an injury on the job, it is important for the employer to keep track of the worker's condition. He or she should also begin planning for the worker's return as soon as possible. It is better to have the worker come back and perform light duties than to stay off work for a long time waiting to return to his or her traditional heavier duties. Having a worker rejoin the workforce and perform lighter duties is a good way to help reduce a claim as well.

Workers' compensation coverage is a must for all employers. Controlling costs will help keep the business competitive and lower expenses. To learn more, discuss concerns with us.

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

-Dan Zeiler

danz@zeiler.com

(708) 597-5900  X134

- See more at: http://thez.zeiler.com/tips-for-workplace-safety-in-this-cold-weather#sthash.hhYluh89.dpuf

0 Comments »

Managing Your Worker's Comp. Claims

Manage Your Workers' Compensation Claims

How can managing your workers' compensation claims process protect every employee?

The first step is to file the claim right away. To this end, have claim forms available to all supervisors. Some companies keep forms near the first aid kit alongside the OSHA log. Management must acknowledge the problem to correct it, so keep good records.

Keep any information regarding preferred doctors networks or nearest emergency care facility with the first aid kit. Maps to these facilities help in crisis management.

Because of the privacy laws, keeping records of employee health concerns (hypertension, diabetes, allergies to medicines) at the ready is tricky at best. Without making the records readily accessible by anyone, they need to be available to supervisors in an emergency.

The insurance company has a depth of claims experience that no insured can have. If not treated properly, some injuries worsen over time. The company has a right to investigate and guide treatment and rehabilitation. A delay in reporting that causes the situation to worsen may create coverage problems. Dutifully report all claims immediately.

Allow the insurance company to investigate the claim. Usually, if the claim results in only medical bills and no lost time, the company will not spend time finding causation; but your company management needs to understand the progression of events that leads to any loss.

Uncover the cause. Were safety appliances, equipment, and personal protection in place and used properly? When the employee was drug tested after the claim, was that an issue?

Use any claim as an opportunity to discuss safety at your next scheduled safety meeting. Discuss the following topics as collateral to the claim:

Assure employees the injury is covered by workers' compensation and the injured will be cared for properly. If the injured is at work, have them report on the level of care.Discuss the results of the investigation regarding the cause of the loss in neutral terms, but no personal information about the employee. This discussion is about future avoidance, not humiliation.Remind employees of the drug testing policy and explain the policy aims to protect everyone.

If the insurance company investigation implies fraud, fake injury, review safety rules or regulations in a more generic form. Perhaps discuss slips, trips, and falls prevention as opposed to that specific incident.

Risk avoidance is your best measure against workers' compensation injuries. Maintaining a safety culture with training, meetings, and management leadership keeps a workplace safer. Having proper paperwork and first aid readily available reduces the lost production effect of injuries.

The more prepared you are to handle an injury professionally, the more you protect your workforce. Manage ahead of the crisis with proper planning.

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

-Dan Zeiler

dan@zeiler.com
(708) 597-5900  X134

0 Comments »

Following Work Place Injuries

Why You Should Be Following Workplace Injuries in Chicago, IL

No matter what type of business you operate, all employers should be ready, willing, and able to conduct their own injury investigation immediately following an incident. Early intervention on your part will be essential in cases where there's been a serious injury or an injury of questionable nature. Such a proactive approach will allow you to keep the incident from spiraling out of control and reduce your liability exposure. After all, the last thing any employer wants to do is engage in costly court actions, some of which could spell the demise of the business.

The following are the three main reasons you must immediately investigate an incident:

1. This time will be your only opportunity to look into the legitimacy and cause of the injury while it's fresh, not possibly tainted by elapsed time.

2. It will be the best opportunity to make an informed managerial decision based on the most thorough understanding of the underlying cause of the incident.

3. It will be the best chance to obtain witness accounts of the incident. Time elapsing could allow witnesses to forget vital details, collude with others, or be intimidated into a false statement.

Now that it's clear why you need to investigate, you'll want to understand how to do so. An investigation is basically an objective, logical process that's conducted step-by-step. It's vital that assumptions aren't made and that conclusions aren't jumped to without completing the process.

It's best to designate specific individuals to carryout investigations. Of course, this designated investigator should thoroughly understand both federal and state laws. He/she should also understand the importance of keeping the results and details of the investigation confidential. Alternatively, it will also be of vital importance to the investigation process that your immediate supervisors have been trained to provide as much detail as they can about incidents.

The investigator will determine if a worker's alleged workplace injury had any casual connection with their employment. For example, it needs to be determined whether or not the worker was exposed to a particular risk or danger at the time of the incident.

Keep these three essential steps in mind as you begin any investigative process:

1. Protect the incident site.

Make every effort to preserve the incident site until either it's no longer viable, legislative requirements have been met, or the investigation has been completed. If this isn't possible, then at least do what you can to make a thoroughly detailed representation of the site. You may use plastic containers or bags to help preserve the integrity of the evidence collected and prevent it from becoming contaminated. You may find it necessary to gather, remove, and store physical evidence in an alternative, secure area.

2. Document the incident site.

If possible, don't remove any physical evidence from the incident site until you've documented it with video, pictures, and drawings. The distance and physical location of evidence can be shown with a diagram. If any equipment was involved in the incident, then you should document the machine's serial number, manufacturing information, and maintenance and service records.

3. Take witness statements.

Of course, you should in no way jeopardize or interfere with an injured worker receiving medical treatment. However, if the severity of the injury allows, you should obtain an immediate statement from the injured worker. Then, you should make a list of all potential witnesses and interview them as soon as possible. If feasible, you can sequester the witnesses and interview them separately to help avoid any possible collaboration, collusion, or intimidation from taking place. Make it perfectly clear to all the witnesses that they aren't to have discussions about the incident with other co-witnesses or co-workers. Make sure that the written statements from the witnesses are in their own words, even if grammatically incorrect, and doesn't contain any blank spaces. Ask the witnesses to sign and date their final statement.

It will be significantly easier for you to determine the validity of disability and compensation claims when you've used the above investigative process to determine the cause of the injury. You'll have the detailed documentation to address any questionable issues and possibly even thwart unfounded litigation claims.

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

Dan Zeiler

dan@zeiler.com

(708) 597-5900  X134

www.insurancenewsletters.com

0 Comments »

2014 Illinois Workers Compensation Rates

I have had many inquiries into the 2014 Illinois Workers Compensation Rates.  If anyone has interest send me an email with the Workers Compensation Class Code in question and I will forward the detail.  If you don't know your class code let me know the type of business you are in and I'd be happy to help.

 

 

 

 

 

 

 

 

 

 

 

 

 

Dan

708.293.5500

dan@zeiler.com

0 Comments »

Man from Normal Sentenced to 8 ½ Years in Prison for Workers’ Compensation Fraud

Illinois Department of Insurance (DOI) Director Andrew Boron today announced a recent workers’ compensation fraud investigation has resulted in an eight and a half year sentence for a central Illinois man. Elbert Rayford, Jr., of Normal, was sentenced on January 24 to more than eight years in prison for attempting to obtain roughly $45,000 in workers’ compensation benefits through fraud. Rayford, a former employee of T.G. Gum Trucking in Farmer City, misrepresented his medical condition and exaggerated his symptoms to doctors and physical therapists in order to remain off work, collect temporary total disability (TTD) benefits, and receive medical care that was no longer necessary.

“Workers’ Compensation Fraud is a crime. We will investigate to determine wrongdoing and then work with law enforcement to make sure perpetrators are prosecuted to the fullest extent of the law,” said DOI Director Andrew Boron.

The investigation was conducted by the Department of Insurance Workers’ Compensation Fraud Unit. Video surveillance showed Mr. Rayford engaged in activities that demonstrated his statements to medical providers were untrue. The case was referred to the McLean County State’s Attorney’s Office for prosecution.

“We appreciate the investigation done by the Illinois Department of Insurance which helped bring about the successful prosecution of this case. The McLean County State’s Attorney’s Office does not take the attempted misappropriation of public funds lightly and we were pleased to assist in bringing Mr. Rayford to justice. We hope this sentence serves as a deterrent to anyone else who considers committing this type of fraud,” said Assistant State’s Attorney Jessica Woods.

Eight and a half years is the longest sentence handed down for violating the anti-fraud provisions of the Illinois Workers’ Compensation Act. The anti-fraud provisions were first enacted in 2005 and were later amended in 2011. The 2011 amendments included stronger sentencing provisions which applied to this case based on the date Mr. Rayford committed fraud. Rayford, who pled guilty, will also be required to pay $585.38 in restitution and serve two years of mandatory supervised release as a part of his sentence upon his release from prison.

For more information about Workers’ Compensation Fraud, including matters that may involve fraud perpetrated by a claimant, visit the DOI website at http://insurance.illinois.gov/WCFU/default.asp. To report an employer, healthcare provider, attorney, insurance agent or company, contact the Workers’ Compensation Fraud Unit at 877-WCF-UNIT (877-923-8648).

Source: illinois.gov

0 Comments »

Illinois Workers Compensation rating and why does it matter?

What Is a Workers Compensation Rating and Why Does It Matter? 

Most business owners and executives understand the value of workers compensation insurance not just to protect the worker, but to protect the company as well. Fewer, however, are aware of the mechanics of how premiums are arrived at, and how their own company's safety track record figures into their rating.  Understanding the process, however, may well enable you to qualify for lower premiums down the road, saving your business money and making you more competitive.

Industry underwriters set workers compensation premiums using a process similar to how most companies price group health insurance: They look at the actual claims experience for similar workers in your area, and if there is a history of claims, at your company specifically. Where there is insufficient local claims experience to look at, underwriters turn to the National Council on Compensation Insurance, a clearing house of workers injury and compensation data.

Generally, underwriters will take your payroll and multiply it by an average claim factor for that type of worker. This produces a baseline average of the total number of expected claims, which they subdivide as claims per $100,000 of payroll, claims per year, or claims per time unit. The frequency of claims is considered to be a close proxy for the safety culture of the individual business. They then account for the average severity of claims for that type of worker in your industry and combine the two to arrive at a baseline prediction for expected losses.

Underwriters must then try to assess your business and answer the following question: Given the policies and procedures in place at your business and your claims history, is your company likely to produce losses that are higher than the industry baseline or lower?

Over time, underwriters have discovered that the most likely future claims predictor is a past history of claims at your company. Therefore, to save money on workers compensation premiums, it behooves the company to invest aggressively in preserving the safety of the work environment, both in terms of resources and management focus.

Your workers compensation agent and underwriting team will assign your company an insurance rating, with 1 deemed equal to the average claims experience in your industry for the area.

Any rating higher than 1 indicates a worse-than-average risk for workers compensation claims. If your rating comes out higher than 1, you may be able to qualify for lower rates in future years by reviewing your safety program and the types of losses your company has incurred. Identify any patterns and refcurring themes. You may benefit from bringing in a risk management consultant for an outside set of eyeballs. Some investment in equipment or improved training may be needed, or you may need to be more vigilant for workers compensation fraud in a few cases.

Best Practices

In the long run, your safety record is a reflection of your overall safety culture. That's not something limited to the rank and file worker and shop foremen, though. The most important link in the safety culture chain is at the top.

 

  • Invest in training your workers in all aspects of safety relevant for their jobs.
  • Appoint a senior manager with clout to monitor your safety and OSHA compliance, and empower him or her to enforce it throughout the company.
  • Empower any worker to halt work activities if he or she becomes aware of an unsafe work condition, until that condition can be corrected.

 

Everyone is part of your workplace safety culture - but senior management is the most important link in the chain, because management sets the tone throughout the organization.

0 Comments »

Illinois Workers Compensatipon - How to Prepare for a Workers' Compensation Audit

How to Prepare for a Workers' Compensation Audit

The mere mention of a workers' compensation audit is enough to strike fear in nearly any business owner. For anyone who is scheduled for an audit, there is no need to worry or be fearful. With a little bit of common sense and preparation, much money and aggravation can be spared.

It is important to devote a few hours to setting up preparations. This small step can prevent days and weeks of hassles in the future. Business owners should plan to give their full attention to the auditor throughout the process, which can take several hours from start to finish. For this reason, it is important to make sure the time and date are both convenient. If the audit has been rescheduled or was not set for an appropriate time, call to reschedule it.

Start collecting and organizing and records that show payroll reports and overtime. Make sure insurance certificates and classification divisions are also available. Write up a summary of each one to make explanations easier and to more effectively communicate with the auditor during the process. If information is organized well, this will help expedite the process. The auditor may feel more comfortable in trusting a business owner's data if all calculations can be reconciled to payroll records.

Prior to the meeting with the auditor, it is also important to make any necessary adjustments to payroll. For example, a business owner might need to subtract bonus pay from overtime pay. Minimum and maximum payrolls will need to be applied to the calculations when applicable. This may take some research, and the amounts will vary from one state to the next. They also vary between types of careers, partners, executive officers and sole proprietors.

Business owners should make sure they understand all employee job classifications and can explain them clearly to the auditor. They should also ensure employees are properly classified for the work they perform. If the auditor has questions or concerns, this can slow the process down considerably. Auditors usually ask about duties and classifications for multiple employees, so being prepared is essential. For help classifying them, discuss the details and any concerns with an agent.

When working with subcontractors, keep in mind that payments made to them will go against workers' compensation if they did not have certificates. Ask for copies of their certificates, and check them carefully to ensure they are updated and show coverage for the entire time span when the subcontractor was working. After the auditor arrives, all of these preparations will be well worth the time spent. Most business owners are also pleasantly surprised to find that auditors are not the mean individuals they picture them to be. Most auditors are pleasant and fair, and this is especially true when all of the details are in order.

After the audit is finished, politely ask the auditor for a copy of the worksheet. We can review it for accuracy. Every person has a legal right to request a corrected audit if any errors are suspected or confirmed. Business owners also have the right to recover any over-payments that were made under the previous three audits.

0 Comments »

Understanding How Illinois Workers Compensation Experience Rating Works

Understanding How Illinois Workers Compensation Experience Rating Works  

Many people wonder why it is necessary to use experience rating to predict future losses if workers' compensation rates are designed for this purpose. Experience rating can benefit employers. The prospects of both bad credits and debits are implicit in the majority of risk-specific programs dealing with experience rating. Since it gives an employer some influence in how much the final premium will be, this gives an incentive for them to develop their loss prevention strategies. It is also good for them to form incentives that encourage injured employees to return to work as soon as they are able. When this happens, experience rating can be beneficial to employers by increasing occupational safety and health.

Experience rating shows a refinement in processes of premium determination. It creates a net premium cost for employers, which means their costs will be appropriate for the provided coverage. Experience rating shares or spreads the cost of a loss with all group members who are likely to go through similar losses. Although the probability and cost of injuries for an entire group as a whole may not be accurately predictable, it is not possible to decide which member of the group will ultimately be responsible for costs.

This is why there is insurance. If it were possible or easy to predict, group members who do not experience loss would not have any incentive to purchase coverage. Meanwhile, the premium charge for members experiencing losses would need to include the loss costs. Serious injuries to individuals are usually rare, but the totals can be minor amounts or reach well into the millions. For workers' compensation, the easiest rating method is manual rating. With this system, employers are categorized according to business classifications or operations. Group losses are estimated and then added as an average.

Employers are assigned to specific classifications to make sure the rates they receive are reflective of the costs all similar employers have. While each classification comes with similar risks, individual ones are different in some ways. However, experience rating is designed to reflect individual differences. Insurance providers would be able to look for employers with lower costs and avoid ones with higher costs if the rating system were only manual. The system needs to be refined to avoid such a scenario, and experience rating falls under that category.

With workers' compensation experience rating, individual employers' loss and payroll data are analyzed over time. The most recent three years of data is reviewed against similar groups' risks to determine the experience modification. An employer that has better experience ratings will be given credits, but those with less will be given debit ratings.

0 Comments »

Real Life Case: Underreporting Payroll for Workers Comp

Real Life Case: Underreporting Payroll for Workers Comp

Some business owners think they can hide or under-report payroll data as a way to save money on taxes and workers' compensation premiums. There are several different ways they can hide payroll data, but it is still a crime that very few prosecutors will turn down. Although this is done to save money, the price of self defense in criminal court and the repercussions of having a criminal record are both costly. In addition to this, the risk of ending a business career can compromise a person's long-term income. The following is a case where a business lost about $100,000 by trying to dodge workers' comp premium obligations.

The owner of a building company was convicted of workers' compensation insurance premium fraud for not reporting some of his employees to his insurer or the Employment Development Department. The owner's daughter was convicted of misdemeanor insurance fraud. Another member of the owner's family who worked there was convicted of felony insurance fraud.

Experts say fraud is an enterprise that brings in billions of dollars, but it provides artificial inflation costs to insurance companies and consumers. In a collaborative effort by the local district attorney's office and the Department of Insurance, the investigation on the business owner started after an employee was injured. The owner paid his workers in cash in order to avoid paying insurance premiums. However, the investigators found evidence that all three of the convicted parties had worked together to convince workers to take cash payments.

The employee who was injured required surgery, but the business owner tried to dispute the worker's claim. Instead, the owner offered the injured worker a disability application form for state assistance, and he instructed the worker to claim the injury occurred at home. The company was ordered to pay more than $45,000 in premium restitution, about $30,000 in EDD back taxes and more than $35,000 in restitution to the injured worker.

It is not easy to hide payroll information, and employees will be vocal if they are injured. In addition to this, there are other ways to track this type of fraud. If an employee is injured, employers should remember that any under-the-table agreements will likely be exposed. Injured employees must look out for themselves and their families. Many other cases are worse. Employees may accumulate higher bills for hospital stays and rehabilitative services. The cost of paying their bills could be much higher than $100,000, and the cost of business disruptions and legal fees would run into the hundreds of thousands. Recovering from an incident such as this is also difficult, and most business owners have to start over from scratch. In comparison with the cost of such a mess, the cost of workers' compensation insurance premiums is minimal. Every employer should remember that it is not worth the risk.

0 Comments »

Questionable Illinois Workers' Compensation Claims are on the Rise

Questionable IL Work Comp Claims are on the Rise  

Researchers analyzed past workers' compensation claims that were considered questionable by referrals, and the reports were submitted over the span of about six months. Although the total number of workers' compensation claims submitted had dropped, the number of claims considered questionable had risen. Questionable claims are ones that experts at insurance companies refer to the National Insurance Crime Bureau for review. When the reports are submitted for review, they are closely analyzed for indications of fraud. In some cases, one report may have several red flags that put it in the questionable category.

The state with the highest number of questionable workers' compensation claims was California, which had more than 2,250. Illinois followed with almost 700, and New York was close behind with nearly 690. In 2011, there were more than 3.3 million workers' compensation claims in a major database. The number decreased to about 3.2 million within the span of one year, and it decreased again in 2013. There were about 3,475 questionable workers' compensation claims reported to the NICB in 2011, and that number increased to more than 4,450 in 2012. This means that claims increased by more than 25 percent. During the first half of 2013, there were about 2,325 questionable claims submitted.

When it came to further describing questionable workers' compensation claims, there were several reasons experts said they referred them. The main reasons were claimant fraud, prior injuries not related to work and malingering. There were more than 6,100 claimant fraud cases, more than 2,300 non-work-related prior injury cases and more than 1,375 malingering cases. Non-work-related injuries pertain to people who claim injuries during days off or recreational days but do not report the incident until they return to work. When they return, they claim the injury happened while they were on the clock. Malingering occurs when a claimant sustained a legitimate injury but kept pretending to experience symptoms in order to collect benefits much longer than necessary after recovering.

Insurance fraud is a growing issue for both consumers and insurers. Many companies are taking steps to prevent it from happening and are also working on ways to improve identification of signs of fraud. If fraud can be prevented before claims are paid, this helps keep premiums more affordable for consumers. When consumers suspect or know of someone committing insurance fraud, it is important to report it.

 

 

 

0 Comments »

Illinois employer lacking workers comp coverage convicted of felony

Illinois said it has won its first felony conviction of an employer for failing to obtain workers compensation insurance as mandated by state law.

The state raised the penalty in 2005 for failure to obtain workers comp insurance from a misdemeanor to a felony.

On Thursday, the Illinois Workers' Compensation Commission announced the conviction of Ahmed Ghosien, who operates a large auto repair shop, Ghosien European Auto Werks, in Hometown.

He never obtained the insurance for his mechanics despite the state's attempts since 2010 to bring him into compliance, the IWCC said in a statement. Mr. Ghosien purchased coverage in February this year after learning of a criminal indictment against him, IWCC said.

Mr. Ghosien pleaded guilty to the felony charge July 25 in Cook County Circuit Court. He faces sentencing in October and is to pay a $25,000 fine.

“Employers who refuse to obtain workers compensation insurance put their employees at risk, gain an unfair advantage over law-abiding competitors and ultimately shift the cost of their business to Illinois taxpayers,” IWCC Chairman Michael P. Latz said in the statement

 

source:   Business Insurance .com

 

0 Comments »

Illinois Workers Compensation and Subcontractors

A bill addressing the missclassification of construction workers as independent contractors has been signed into law by Governor Pat Quinn.   

House Bill 2649 is meant to fight employers who missclassify their workers in an attempt to avoid paying state employment taxes, unemployment insurance, worker's compensation, and overtime. The practice turns the tax burden over to workers and costs the state up to $700 million a year in lost payments and taxes.

Under the new law, the Employee Classification Act will be clarified and it will be easier to pursue violators.

In addition, the signing of House Bill 923 also amends the Employee Classification Act to require all contractors report all payments to people not classified as company employees to the Illinois Department of Labor. The goal is to prevent tax evasion and ease tax liability for those workers.

The two laws go into effect on January 1.

0 Comments »