Reporting all workers’ compensation claims promptly is a critical component to controlling workers’ compensation claim costs. Failure to report an employee’s claim promptly can have financial implications and can damage employee morale. It is also required by many states and by OSHA in some situations.
Workers’ compensation claims can be reported late due to inaction on the part of the employer or the employee. The employer may be uncertain if a claim is work-related or may hope that a small claim will go away. Employees may think that they will be blamed for the accident or that reporting a claim will affect their relationship with their employer. Employees may think an injury is minor and will resolve itself quickly.
The financial effects of late reporting can be significant, as the average cost of a claim is typically higher if it is reported late. There are several reasons for this:
- A delay in seeking treatment may cause a deterioration in the employee’s condition that will impede the employee’s recovery time.
- An insurance carrier’s ability to investigate a claim, determine compensability and identify potentially fraudulent claims may be hindered as witnesses may no longer be available or key evidence may not be preserved.
- The ability to deny uncompensable claims can be impacted as many states have regulations that prohibit denial of claims after a specified time period. The ability to deny a claim due to a worker being under the influence of drugs or alcohol can also be impacted by reporting delays.
- The opportunity to direct the initial treatment to an occupational health clinic that specializes in treating workers’ compensation injuries and coordinates with the employer’s Return to Work program may be lost.
- The benefits of using nurse case managers or other managed care initiatives to effectively manage the care of the worker can be limited with late notice.
- Many states have prompt reporting requirements and impose fines if an insured reports a claim late or fails to report a claim. OSHA has claims reporting requirements for certain claims that may not be met if reported late (note that effective January 1, 2015, new, more stringent OSHA reporting requirement apply).
The effects of late reporting of workers’ compensation claims on the workforce can also be significant:
- The sense of trust between an employee and their employer is a key factor in the outcome of a workers’ compensation claim and this trust is affected if an injury isn’t addressed promptly.
- Other employees may be unhappy to learn that a co-worker’s claim has not been addressed promptly, particularly if they are handling additional work to cover for the injured worker.
- The ongoing communication between employee and employer that encourages an employee to return to work is delayed when claims are not reported promptly.
Reporting of all claims, including minor ones, provide an opportunity for accident investigation to help prevent future losses. This opportunity is diminished if the claim isn’t reported promptly.
Here are a few guidelines for encouraging prompt reporting of claims:
- Train managers on the importance of reporting claims promptly.
- Have written procedures on the process and assign a back-up contact in the event the manager is absent.
- Encourage employees to report all claims, even if they don’t think they are serious.
- Reassure employees that there are no negative repercussions for reporting a claim.
Reporting all claims on time can provide an opportunity to investigate that particular accident in hopes of learning how you can prevent any future, similar accidents and can help to keep insurance costs down. Establish a company culture that emphasizes the need to report any and all claims promptly and that employees won’t be punished for doing so. This may take some time but you will see the rewards over time. Contact Acadia Insurance to learn more.
Acadia Insurance is pleased to share this material with its customers. Please note, however, that nothing in this document should be construed as legal advice or the provision of professional consulting services. This material is for general informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness. Distribution of this information does not constitute an assumption by us of your obligations to provide a safe workplace. Maintaining a safe workplace in accordance with all laws is your responsibility. We make no representation or warranty that our activities or recommendations will place you in compliance with law, relieve you of potential liability or ensure your premises or operations are safe. We exercise no control over your premises or operations and have no responsibility or authority to implement loss prevention practices or procedures.