By James Moore
Monday, December 7, 2020 | 48 | 0 | min read
When does a reopened employee compensation scheme cost more budget for insured and self-insured employers?
James Moore
I checked a file that contained one of the classics that cause agents, risk managers, insurers, rating agencies, and most importantly, insured parties to get very angry with claims adjusters.
Adjusters have a hard enough time making everyone happy (think impossible).
As with my last article, a simple solution can be achieved. I’ll give you the exact example with all names removed for anonymity.
Everything wasn’t good
A very good lead appraiser had handled a claim very well in my opinion. Well done! The file was closed in time. The claim was an eye injury. These claims can be complicated at times.
The injured employee, a conscientious employee who was brought from the office to her home, took her commitment to the limit. She worked 15 hour days for her employer – possibly too many hours. Here is an A for the effort from me to her.
A good employee who had an eye injury at work was only away for two weeks. This is one of those claims where workers, employers, carriers and providers have worked together to get a good worker back into work as quickly as possible.
The employer gave her a desk job. My six keys to saving employee comp claims were followed. Everyone involved did an excellent job.
Since the employee was only unemployed for two weeks, the reserves were set very precisely. The medical portion of the reserves was set very high due to the possibility of an eye operation, which never occurred during the medical treatment of the injured employee.
Just bad timing?
This situation happens quite often. The file was reopened with the old reserve, although only a few medical bills were to be paid. The bills were $ 845.
The file was reopened with medical reserves in excess of $ 20,000. From there, the injured employee was seen and all medical bills were paid. Even if there was a future office visit, the $ 20,000 file reserves were left open.
The UNISTAT date hit and boom! – $ 20,000 in additional reserves hit the experience modification factor.
The moral of the reopened worker comp claims story
Reopened files are common. Regardless of the timing, the main idea is to close the file again or quickly reduce the reserves when the file is reopened to suit the situation.
No, $ 20,000 wasn’t a tragedy in this situation.
I saw files in much larger quantities for reopened employee claims during the pandemic. No, I am not too picky.
This blog post is provided by James Moore, AIC, MBA, ChFC, ARM and republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.
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