The Cost of
Workers’ Compensation Benefits
Summer
Conference
2013
FY 2013 Comparisons
WC Benefits Paid
FY13
Indemnity
$ 23,648,377
FY13
Medical
$32,924,949
Total:
$ 56,573,326
FY12
Indemnity
$22,414,804
FY12
Medical
$32,621,320
Total:
$55,036,124
FY 2013 Comparisons
State and Local Benefits Paid
WC Payments
FY 12
FY 13
Total Paid
$55,306,125
$56,573,326
Total Local
Paid
$7,437,755
$7,417,730
Total State Paid
$47,598,369
$49,155,597
Average
Payment Per
Day
$150,783
$154,995
Injury FY
Prior to 2009
Open Claims
Total Claims Reported
Paid in Period
Total Paid to Date
Total Reserves
Total I ncurred
FY 2009
Open Claims
Total Claims Reported
Paid in Period
Total Paid to Date
Total Reserves
Total I ncurred
FY 2010
Open Claims
Total Claims Reported
Paid in Period
Total Paid to Date
Total Reserves
Total I ncurred
FY 2011
Open Claims
Total Claims Reported
Paid in Period
Total Paid to Date
Total Reserves
Total I ncurred
FY 2012
Open Claims
Total Claims Reported
Paid in Period
Total Paid to Date
Total Reserves
Total I ncurred
FY 2013
Open Claims
Total Claims Reported
Paid in Period
Total Paid to Date
Total Reserves
Total I ncurred
Total
Total
Total
Total
Total
Total
Open Claims
Claims Reported
Paid in Period
Paid to Date
Reserves
Reserves
6/30/2009
6/30/2010
As of Date
6/30/2011
6/30/2012
6/30/2013
1,073
870
707
613
572
72,370
72,399
72,408
72,412
72,412
$31,984,221
$20,393,195
$17,838,318
$16,523,966
$14,717,237
$334,602,786 $354,995,981 $372,834,299 $389,358,265 $404,075,502
$78,856,081
$65,221,270
$71,337,812
$67,934,124
$67,524,929
$413,458,867 $420,217,251 $444,172,111 $457,292,388 $471,600,430
2,524
6,743
$10,874,680
$10,874,680
$14,217,990
$25,092,670
549
6,894
$12,561,664
$23,436,344
$11,957,151
$35,393,495
295
6,918
$8,694,091
$32,130,435
$12,325,209
$44,455,643
194
6,918
$5,878,448
$38,008,882
$11,771,570
$49,780,453
151
6,915
$4,668,554
$42,677,437
$10,356,123
$53,033,559
2,331
7,259
$9,829,474
$9,829,474
$12,503,843
$22,333,317
553
7,436
$13,979,467
$23,808,907
$14,827,787
$38,636,694
304
7,452
$9,591,089
$33,400,086
$14,003,606
$47,403,692
215
7,454
$5,438,805
$38,838,891
$13,721,443
$52,560,333
2,166
5,895
$9,878,679
$9,878,554
$17,007,565
$26,886,118
478
6,076
$12,974,024
$22,853,379
$13,224,185
$36,077,564
285
6,083
$6,986,458
$29,839,842
$11,694,147
$41,533,989
2,381
6,079
$10,068,597
$10,068,597
$18,847,470
$28,916,067
576
6,291
$14,234,237
$24,302,834
$15,438,179
$39,741,013
2,543
6,085
$10,669,717
$10,669,717
$19,902,987
$30,572,704
3,597
79,113
42,858,901
345,477,466
93,074,071
438,551,537
3,750
86,552
42,784,333
388,261,799
89,682,264
477,944,063
3,721
92,657
50,390,555
438,652,194
115,498,373
554,150,567
3,970
98,937
55,036,123
493,689,209
125,780,955
619,470,164
4,342
105,240
56,715,007
550,404,222
138,637,807
689,042,029
SB43 Make Recommendations
Regarding Management of
Workers’ Compensation
 Signed by Governor 23 July 2013
 Identify Expenses, How Budgeted and Paid
 Study TPA and Legal Fees - How Allocated
 Recommend Alternative Budgeting Methods
 Increase Flexibility of Settling WC claims
 Motivate Agencies to Return Employees
Back to Work as soon as possible
SB174 Act to Disapprove Certain Rules
Adopted by the NCIC
 Signed by Governor 18th July 2013
 Revised “Expedited Medical Motion” requiring injured
worker to go through the Commission, as employer has the
right to contest the motion. Commission decides outcome
and has up to 35 days --- 5 days for emergency
 Form 23 revised. Application to Reinstate Temporary Total
Disability Benefits. Workers will be required to file a
Request for Hearing (Form 33). Commission will decide
whether there is sufficient basis to reinstate TTD Benefits
 Court Costs may be shifted from employer to shared cost
between employee and employer.
Bid Time – Third Party Administrator
 RFP posted for TPA – End of 2013
 Services
Processing of First Report of Injury
Split Funding Requirements
Claim Adjusting & Administration
Medical Provider Network
All other Services Network
Data Collection & Warehouse
Claim Resolution
 Contract Award May 2014
Maximum Medical Improvement
What is it? What does it Mean???
 MMI is the turnkey to closing WC File
 Final word from Treating Physician
 Employee reaches a state where medical
condition & treatment have plateaued
 Treating Physician provides rating -- permanent,
partial or no disability (NCGS 97-31)
 Treating Physician may incorporate job
restrictions within MMI
 MMI means treatment options have been reached
 Return employee back to work or settle claim.
Drug Testing
 NCGS 97-12 Use of intoxicant or
controlled substance, willful neglect,
willful disobedience of statutory duty,
safety regulation or rule.
1) Not supplied by employer
2) Under the influence where
controlled substance was not
prescribed
3) Willful intention
 Who has burden of proof ?
Proximate Cause
 Employer must prove that employees
intoxication was more probable than not a
proximate cause of the accident resulting in
injury.
Job Descriptions
 Written Job Description
 Actual Work Activities
 Treating Physician must approve
 Job must be “real”
Suitable Employment
 Employment offered to employee
- Before Reaching MMI – Employment
within employee work restrictions
- After reaching MMI - Employment
that employee is capable of performing
- Located within 50 mile radius of
employee residence
 Without Suitable Employment
- Vocational Rehabilitation
- Continue with Weekly Indemnity Payments
Terminating An Employee While On
Workers’ Compensation Benefits
Employee sustains a compensable WC injury
Returned to work and provided light duty or rehabilitative
employment
Is terminated from such employment for misconduct or
other fault
Will termination initiate lost time payments for Temporary
Total Disability?
Prove employee’s loss of, or reduction of wage earning capacity is
attributable to the wrongful act resulting in the loss of employment.
In which case, WC benefits will be barred.
Wage loss or reduction in wage earning capacity due to employee’s
work-related disability, will entitle employee to benefits.
Separation Due To Unavailability
Will Separation Due to Unavailability
terminate an employee’s workers’
compensation benefits?
Have you considered Separation Due to
Unavailability?
How Can We Lower Workers’
Compensation Expenses?
 Report claims timely
 Utilize PPO Network provided by TPA
 Complete Wage Statement (Form 22) Accurately
 Know status of every open WC claim
 Work with adjuster on Return to Work
 Provide Accurate Job Descriptions
 Follow employee’s MMI status
 Get disability paperwork to employee’s if eligible
 Settle with Resignation and before Employee Retires
THANK YOU
Eileen Townsend, CPCU, AU
Chief of Insurance
eileen.townsend@dpi.nc.gov
919-807-3522