Employer s Guide to Workers Compensation

Transcription

1 Employer s Guide to Workers Compensation

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3 ABOUT PINNACOL ASSURANCE Mission statement To provide assured protection to Colorado employers and their greatest asset their employees. Who we are For more than 90 years, Pinnacol Assurance has been the assured and trusted source of workers compensation insurance for Colorado employers. During that time, the state has seen exponential growth and change and Pinnacol has kept pace through innovation, reorganization, and a focus on entrepreneurial business practices all while never losing sight of our original goals. Today, Pinnacol provides comprehensive, competitively priced assured coverage, immediate attention to claims; a highly qualified network of SelectNet medical providers; and proactive safety programs to over 60,000 Colorado companies more than half the businesses in the state. Our financial outlook has never been better. We have built a healthy surplus and in 2007 rewarded our policyholders with a general dividend a portion of the surplus paid to customers who maintain safe workplaces for the third consecutive year. And, in a recent survey, Pinnacol policyholders rewarded us with their highest-ever rating for overall customer satisfaction. What we offer A dedicated team of workers compensation professionals for every policyholder Aggressive, proactive safety programs and safety consultants Our SelectNet network of healthcare providers with expertise in work-related injuries A special investigations unit dedicated to combating insurance fraud In-house legal staff and outside legal partners who specialize in Colorado workers compensation law Extensive online services to help policyholders effectively manage their claims Superior underwriting and auditing services Other states coverage for Colorado policyholders with operations outside of the state Group short-term disability insurance More important, some 90 percent of our policyholders choose to renew their policies every year. We believe this loyalty demonstrates that Pinnacol Assurance is still what we set out to be when we were created: an assured, trusted source of workers compensation insurance for Colorado employers. 1

4 What s inside: An overview of workers compensation insurance Detailed information about the services Pinnacol Assurances provides Explanations of workers compensation laws and regulations Definitions of common workers compensation terms Tips on how to: Make the most of your partnership with Pinnacol Assurance Get the greatest value for your premium dollar Keep your employees safe 2

5 TABLE OF CONTENTS Workers Compensation Insurance: An Overview About Your Pinnacol Assurance Policy Premiums Payment and Billing Options Discounts Other States Coverage Group Short-Term Disability Insurance Mandatory Notices Claims Return-to-Work Auditing Legal Services Loss Prevention Medical Cost Management Fraud Prevention and Detection General Dividend Online Policyholder Services Seminars and Publications Right to Privacy Workers Compensation Terms How to Reach Us For customer service call or or visit 3

6 WORKERS COMPENSATION INSURANCE: AN OVERVIEW Workers compensation insurance provides for medical expenses and benefits to cover injured workers loss of earnings. As the employer, you are required to pay the full cost of workers compensation insurance. Who is involved? All employers are required to provide workers compensation insurance. This includes every person, association, firm, partnership, limited liability company, private corporation, public service corporation, assignee, trustee, or receiver who employs one or more persons. The Colorado Legislature writes the laws under the Workers Compensation Act that all insurance carriers must follow. The Division of Insurance oversees all insurance carriers (including Pinnacol Assurance) authorized to provide coverage in Colorado and approves changes in pricing. The Division of Workers Compensation (DOWC) monitors the system and acts as an enforcement agency to employers not carrying workers compensation insurance. The DOWC acts on behalf of injured workers and promotes understanding of the rules and regulations of the Workers Compensation Act. Insurance carriers such as Pinnacol provide workers compensation insurance coverage to employers. Who is covered? All employees are entitled to coverage. This includes any person hired to perform services for pay, including elected or appointed officials. Uninsured contractor s employees. Employers who lease or contract business to an uninsured contractor or subcontractor must also provide workers compensation benefits in the event of an injury or death to the uninsured contractor s employees. Always ask subcontractors for a certificate of insurance and call the insurance company that issued it to verify coverage. Corporate officers and members of limited liability companies who are active in the company are considered employees but may be eligible to exempt themselves from coverage. They must meet certain statutory conditions to reject coverage. Who is not covered? Corporate officers and members of limited liability companies who (a) have at least 10 percent ownership in, (b) have control of, and (c) are active in the day-to-day operation of the business may choose to exempt themselves from coverage. Each officer who rejects coverage must give Pinnacol written notice, signed by the officer, notarized and attested to by the corporate secretary. Working partners and sole proprietors are automatically exempt. They are eligible for coverage but must request it in writing. Volunteers generally are not covered under the Workers Compensation Act unless they are part of a volunteer fire department, search and rescue team, ambulance team, civil air patrol or, in some cases, volunteer police. Employees of charitable, fraternal, religious, or social employers are not covered if they are elected or appointed to serve in an advisory capacity and receive an annual salary of $750 or less. People employed by private homeowners to do domestic duties or maintenance, repair, remodeling, lawn care, or similar work at the homeowners residences are not covered when all of the following conditions apply: 4

7 The employees work less than 40 hours per week. The employees work less than five days per week. The homeowners have no other employees subject to workers compensation laws. The employees work is not within the course or scope of the trade, business, or profession of the homeowners. Licensed real estate salespersons and brokers are exempt if the written contract specifies that the salespersons and brokers are independent contractors and are not treated as employees for tax-reporting purposes. They must be paid only by commission and must be licensed in real estate sales. People employed to do farm and ranch work or casual maintenance, repair, remodeling, lawn care, or similar work at a place of business are not covered when all of the following conditions apply: Total wages for the calendar year are $2,000 or less. The employers have no other employees subject to workers compensation laws. The employees work is not within the course or scope of the trade, business, or profession of the employers. Pinnacol provides our policyholders with independent contractor status forms to help determine whether or not an individual qualifies for independent contractor status. Penalty for failure to comply If you, the employer, fail to comply with the law or allow your workers compensation insurance policy to lapse, your employees or their dependents may claim benefits as provided by the law, plus an additional 50 percent of those benefits. Employers who contract with a landowner or lessee of a farm or ranching operation to perform specific farming or ranching functions and fail to insure their employees may be subject to a 50 percent increase in benefits paid, a jail sentence, and a fine. Injury outside of Colorado If an employee hired for regular employment in Colorado suffers a work-related injury outside the state, he or she is entitled to coverage under the Colorado Workers Compensation statutes and fee schedules. This coverage applies for up to six months of out-of-state work, unless the employer files advance notice with the Division of Workers Compensation to extend coverage. Independent contractors are not entitled to workers compensation benefits. The two main criteria for determining whether an individual is truly an independent contractor (a person not recognized by the law as being an employee and therefore not entitled to workers compensation coverage) are: The employer does not control or direct the individual s performance of the service. The individual is engaged in an independent trade, occupation, profession, or business related to the service performed. 5

8 ABOUT YOUR PINNACOL ASSURANCE POLICY Your policy will be automatically renewed on an annual basis unless you or Pinnacol Assurance cancels it. Please notify Pinnacol of any changes in your business, such as a change in the type of operations, number of locations, or ownership. Because these changes can affect your policy, failure to notify us can, in some cases, result in denial of claims. Your policy is not transferable or assignable in the event of a change in ownership of the business. If you are buying a business, you should know that claims associated with that business are transferable. To obtain Certificates of Insurance, call Pinnacol s customer service team at or You can also request a Certificate of Insurance online. Go to and click Pinnacol ServiceLink. Certificates are issued for a one-year policy period. Your premium payments must be current to receive certificates. Payment is due in full within 20 days of the issuance of your bill or your policy will be cancelled. Payment plan options include: Annual premium Under this payment plan, the premium is based on your organization s estimated payroll for the upcoming year. You will be billed for the total estimated premium 35 days in advance of your current policy s expiration date. Payment must be received 15 days prior to your current policy s expiration date or your coverage will not be renewed. Installment plans Some policyholders qualify to receive bills at regular intervals throughout the policy period. Policyholders choosing installment plans are charged a $5 fee per installment after the initial billing. Ask your agent or Pinnacol underwriter about an installment plan. Monthly and quarterly payroll reports If your business experiences large, seasonal changes in payroll, you may qualify to pay premiums based on your actual payroll for the previous month or quarter. Payment is due when you file monthly or quarterly payroll reports. Since the premium is not collected until the end of the month or quarter, a deposit may be required for some policies. The deposit is credited to your account at the end of the policy period. Retrospective rating plan This is a type of cost-plus payment plan, which allows for a return of premium if losses are low. However, if losses exceed expectations, additional premium will be charged. The retrospective rating plan is appropriate for larger policyholders who can finance a potential obligation for additional premium without adverse impact on their business. Large risk alternative rating option The large risk alternative rating option is used on those accounts that have at least $400,000 in standard premium, and allows for creation of the retrospective rating factors using the account s actual claims experience. Loss control dividend plan The loss control dividend plan is for policyholders who are committed to effective loss control but do not want to incur the risk of a retrospective plan. The plan also allows you to earn a dividend based on your loss ratio for the policy period. The dividend is guaranteed, which means that as long as you maintain a loss ratio low enough to qualify, Pinnacol will pay the dividend. This plan is available to policyholders with premium of $20,000 or more. 6

9 Deductible plans Pinnacol s deductible plans allow policyholders to pay a portion of their claims costs on a per-claim basis in exchange for a premium credit. By law, all claims must be filed with Pinnacol and all medical bills must be paid by Pinnacol. Policyholders are then billed for the deductible amount. For more information, see the section titled Discounts on page 10. Group and association dividend plans Group dividend plans allow groups and associations of employers to save money on workers compensation insurance by sharing resources and expertise. Rather than individual employers having separate safety plans, the group develops one plan for all members to follow. Group members determine the direction, parameters, and rules of the plan and are in charge of the group s dividend. No member will pay more for participation in this plan than he or she would as a non-participant. Group requirements: Have at least five participating members and a combined premium of $250,000. Formalize the group; it must exist for reasons other than just this plan. The group must conduct quarterly meetings and have elected officials, as well as a formal membership. Have a commitment to safety and loss control. Designate two medical providers from Pinnacol s managed care network, SelectNet, where available. Adopt and publish a written safety policy. Designate a loss control committee. Report injuries within two working days. Adopt, publish, and enforce written safety rules applicable to each member business. 7

10 PREMIUMS The amount you pay for workers compensation insurance is based on the nature of your business, with each industry paying according to the likelihood of employee injury. A high incidence of claims in an industry is reflected in the premium charged to that industry and individual members of it. Rates The National Council on Compensation Insurance (NCCI) establishes loss cost rates for Colorado using premium and loss data provided by all workers compensation insurance carriers in the state. After the Colorado insurance commissioner approves the loss cost rates, each carrier adds its expenses to determine the final rates. Each carrier also applies its own discounts. Premium determination Your company s premium is based on the classification code, total payroll, and any discounts for which you may qualify (see the section titled Discounts on page 10). An annual policy fee is applied to every policy to cover expenses such as issuing, recording, and auditing. Pinnacol Assurance provides workers compensation insurance at the lowest possible cost, offering discounts to policyholders who have low claims costs, hold cost containment/safety certification from the state, and have designated a medical provider. Classification codes Your company will be assigned one basic workers compensation classification code that best describes your business. There are approximately 600 classification codes. The overall business is classified, not the individual departments or operations within your business. Exceptions are made for certain occupations common to most kinds of businesses, like clerical workers, as well as for certain industries, like construction, where a business may be involved in more than one type of work. 8

11 PAYMENT AND BILLING OPTIONS Pinnacol Assurance gives you flexibility in paying your company s workers compensation insurance invoices. Pinnacol offers three payment options: Electronic funds transfer Pinnacol s electronic funds transfer (EFT) process allows you to create a recurring payment plan or pay for a single invoice by automatically transferring funds from your savings or checking account with one phone call. You choose the type of payment plan and the combination of financial transactions to be paid throughout your policy period. Credit card payment You can pay for invoices associated with your policy with a personal or corporate credit card. Call our customer service team between 7 a.m. and 5 p.m., and have your invoice and credit card number ready. These transactions are safe and secure. Mail directly to bank For businesses that choose to mail payments, it is important that you understand our billing process and timelines to adjust your mailing accordingly. Please keep the following guidelines in mind to allow sufficient time for delivery and posting of your mailed payment; this will avoid possible cancellation of your policy. Invoices are due 20 days after issuance. Renewal invoices are mailed 35 days before the renewal month and are due 20 days after issuance. Payments must be mailed directly to the Wells Fargo Processing Center. Please include the payment coupon with your payment and write your policy number on your check. Please allow sufficient time for delivery and posting of your payment to avoid possible cancellation. On average, payments are posted the day after they are received at the Wells Fargo Processing Center. If payment is not received by the due date, a notice of cancellation will be issued and sent via certified mail. Please ensure overdue balances are resolved by the cancellation due date so your policy remains in effect. Billing You can change the invoice (billing cycle) date of your premium invoices to the day of the month that works best for you. By setting an invoice date, you maintain greater control over your company s cash flow. Cancellation and reinstatement policy Once a policy has been cancelled for non-payment, it will be reinstated only once during a 12-month period. In addition, a $165 fee will be required on all reinstatements, as well as a letter assuring Pinnacol that no injuries have occurred during the time the policy lapsed. To be reinstated, all outstanding premium must be paid with a credit card or certified funds within 14 calendar days after the cancellation date. The no-loss letter and the reinstatement fee must also be received by Pinnacol within that 14-day time frame. If you are not able to meet these requirements, your policy will no longer be eligible for reinstatement. Policies that cancel more than once during a 12-month period must be rewritten; they cannot be reinstated. For more information on our billing and payment options, call Pinnacol at or , or contact your insurance agent. 9

12 DISCOUNTS Pinnacol Assurance offers a variety of discount options that may help you lower your premium costs. Premium discount The premium discount increases with annual premium. The larger your policy premium, the greater your percentage of premium discount. Retention discount Pinnacol awards a discount to policyholders with manual premium of less than $10,000 in standard tier who have remained continuously insured with Pinnacol for three full policy periods or more. Policyholders insured with Pinnacol for three full policy periods receive a 5 percent credit of modified premium. Policyholders continuously insured for six or more full policy periods receive a 7 percent credit of modified premium. The retention discount takes effect at the first renewal following the three and six full policy period dates. If the company name or structure changes within the three to six full policy periods, the underwriter will award the discount only if the primary owners have continuously had coverage with Pinnacol. Schedule rating Pinnacol s schedule rating plan is designed to assess the current risk characteristics in conjunction with the historical performance of the risk. The plan may adjust the premium with either a debit or a credit. The purpose of the plan is to acknowledge rate factors not included in other Pinnacol pricing. The plan applies to accounts with a manual premium of $10,000 or more annually for policy periods effective on or after December 1, The maximum schedule rating adjustment is 25 percent, which includes the 2.5 percent designated provider discount. Cost containment discount To become eligible for a discount through the Workers Compensation Cost Containment Certification Program, employers must receive their certification from the state of Colorado. Certification requires a loss prevention program and cost containment program be in place for at least one year, in compliance with criteria set by the Colorado Division of Workers Compensation. If you would like to know more about becoming cost containment certified, contact Pinnacol s customer service team at or Designated provider discount Pinnacol s policyholders will receive a 2.5 percent premium discount for choosing SelectNet medical providers for workers compensation-related treatment and case management. SelectNet is Pinnacol s network of occupational health providers. This discount does not reduce the minimum premium. Under Colorado law, employers must designate two medical providers from which an injured employee may choose treatment in the event of work-related injuries or illnesses. The two designated providers shall be at two distinct locations without common ownership. There are some exceptions to this law based on location, nature of the business being operated, or availability of on-site health care. 10

13 Deductible discount Pinnacol s deductible plan allows policyholders to pay a portion of claims costs on a per-claim basis in exchange for a premium discount. For a small claim deductible plan, policyholders can choose a per-claim deductible amount of $500, $1,000, $1,500, $2,000, 2,500, or $5,000. Other deductible plan options: Large deductible plan Minimum premium of $500,000 Mid-size deductible plan Minimum premium of $20,000 Deductible options of $10,000 to $75,000 Upfront discount The aggregate limits the company s total annual liability By law, all claims must be filed with Pinnacol and all medical bills must be paid by Pinnacol. Policyholders are then billed for the deductible amount. Per occurrence options The base premium is lower for those policyholders who have demonstrated lower than average claims The aggregate option limits a company s total annual liability OTHER STATES COVERAGE For Colorado-based businesses with operations outside the state, Pinnacol Assurance provides one-stop shopping for all your workers compensation needs. Colorado-based businesses with operations outside of the state can purchase workers compensation coverage from Argonaut Insurance Company through Pinnacol. This partnership allows Pinnacol s Colorado policyholders to obtain other states coverage in 45 states.* Our policyholders receive the same superior claims management and customer service they have come to expect. Benefits include: Quick, convenient claims reporting Exceptional claims management Timely initiation of benefits * Not including the monopolistic states of North Dakota, Ohio, Washington, West Virginia, and Wyoming. 11

14 GROUP SHORT-TERM DISABILITY INSURANCE A company s most valuable assets are its employees. Employee absence due to injury or illness affects any company s productivity and bottom line. Pinnacol s Short-Term Disability plan, underwritten by Standard Insurance Company, offers wage replacement benefits for covered non-occupational physical disease, injury, pregnancy, and mental disorder. Our Short-Term Disability plan: Provides effective case management Cuts the cost of sick-leave plans Provides a full range of disability coverage Reduces expenses of retraining or hiring new employees Premium usually costs less than one-half of one percent of payroll, and the premium is tax deductible. Attracts and retains high-quality employees MANDATORY NOTICES The law requires all employers to display the If You Are Injured on the Job and the Notice to Employees: Your Rights posters. The law requires all employers to display two posters at each work site. The first, an 11 x 17 injury notice poster, states, If you are injured on the job, written notice of your injury must be given to your employer within four working days after the accident pursuant to Section (1), Colorado Revised Statutes. The poster also warns employees that if their injuries are the result of drug or alcohol use, their workers compensation benefits may be reduced by one half. The Notice to Employees poster specifies an employee s rights under the Workers Compensation Act. This poster must include the names of the company s designated medical providers in the space provided. or Spanish language versions can be obtained by calling Pinnacol s customer service team. Other posters, safety materials available Pinnacol also has a workers compensation fraud prevention poster available for employers. This poster serves as a way to educate employees about the consequences of workers compensation fraud. We also have a variety of free safety posters, pamphlets, and other materials to make your business a safer place. To order any of these materials, call our customer service team at or Both posters must be displayed prominently at your work site. Pinnacol Assurance will provide copies of each poster free to policyholders. Additional copies 12

15 CLAIMS Every hour you delay in reporting injuries can cost you money. Early reporting of claims has been proven to reduce attorney involvement, reduce the number of lost work-time claims, and lower overall claims costs by 25 percent or more. Claims management It is important for your organization to practice active claims management. This includes early reporting, designating a medical provider, and offering modified duty to return injured employees to work as soon as possible. Early reporting is essential The law states you have 10 days from the time a worker notifies you of an injury until you report it. However, waiting 10 days can be costly. Notifying Pinnacol within the first 24 hours can reduce costs significantly. Filing injury reports In the event of an injury, contact Pinnacol immediately. We will need some basic information regarding the injury, including: Your policy number Name of the injured worker Injured worker s Social Security number Injured worker s home address (if known) Injured worker s occupation Date of the injury To complete the filing process, we will need all details of the accident. If you file your report by phone, you can expect the call to last seven to 10 minutes. We will assign a claim number to your claim. Keep this number handy and include it on all correspondence with us. We will also complete a First Report of Injury form, file it with the Division of Workers Compensation, when required, and mail a copy to you for your files. When you report a lost-time injury, your claims representative and medical case manager will give immediate attention to your claim. They will ensure your worker receives proper medical care and, if needed, lost-wage benefits. They can also assist in returning the worker to modified duty whenever appropriate. Filing options Filing online To file a report of an injury using the Internet, simply go to click on Pinnacol ServiceLink, then click on Report a New Injury. Filing by phone To report an injury by phone, call or and press 2. Filing by fax You may also file a claim by fax. Use the First Report of Injury form and filing guide provided in the new policyholder packet you received from Pinnacol. If you fax other documentation with the form, be sure to write your policy number and the injured worker s Social Security number on all attachments. Our fax number is After we have a completed a First Report of Injury form, we will send you, the worker, and the physician a letter providing the claim number and the contact information for the claims representative handling the case. Employee responsibility Wage replacement benefits can be reduced by up to 50 percent in cases where the employee s injury resulted from: The willful failure of the employee to use safety devices provided by the employer. The employee s willful failure to obey any reasonable rule established by the employer for the safety of the employee. (It must be proven that specific written rules existed, the employee had knowledge of the rules, and the employer enforced the rules.) 13

16 The employee being under the influence of alcohol or a controlled substance. Questionable claims Pinnacol will usually determine liability based on the First Report of Injury filed unless alerted to a questionable claim. If you question whether an injury arose out of or in the course of employment, you should report the alleged injury and explain the circumstances surrounding the alleged accident. Your claims representative will contact you to follow up. It is important to thoroughly document all claims as soon as possible after the injury. This includes taking detailed statements from the injured employee, his or her supervisor, all witnesses, and the person to whom the accident was reported. This documentation may be your most important defense in the case of a disputed claim. If necessary, the claims representative may assign an investigator from Pinnacol s special investigations unit to assist with the accident investigation. Third party involvement and subrogation If an employee is injured as a result of an action by someone not employed by you, it is important to attach a letter of explanation to the First Report of Injury and to call or fax us immediately so we can begin investigating. Two common examples of third party involvement are: An on-the-job automobile accident in which a third party the other driver causes the accident. An equipment malfunction resulting in injury. In some cases, the equipment manufacturer may be liable. Please document everything that happened in the accident and obtain witness statements where appropriate. Take care not to destroy any possible evidence, as this may assist us in taking legal action on your behalf against a third party. Such legal action is known as subrogation. Subrogation means to substitute and, in workers compensation, the right of Pinnacol (or any workers compensation carrier) to substitute itself for an injured worker in seeking reimbursement for benefits paid to that injured worker. In other words, Pinnacol steps into the shoes of the claimant in order to pursue the claim against a third party responsible for the injury. If Pinnacol can recoup some of the claim cost from the responsible party, your premium won t be affected as much. For this reason, Pinnacol aggressively pursues third parties that we believe bear some responsibility for workers injuries. Selecting a physician Beginning 1/1/2008, the law requires that you provide a list of at least two medical providers from which an injured employee may choose treatment in the event of a work-related injury. The two designated providers shall be at two distinct locations without common ownership. There are some exceptions to this law based on location, nature of the business being operated, or availability of on-site health care. Contact Pinnacol at or , x 4945 for details. If you have not made medical provider designations at the time of an injury, the employee has the right to choose the doctor which can result in higher medical costs. Pinnacol has a network of highly qualified medical providers, called SelectNet, from which you can choose your designated providers. Here are just a few of the benefits of designating a SelectNet provider: Premium discount: 2.5 percent Average medical cost per claim: $1,200 less with a SelectNet provider Average number of days missed from work: 12 days less with a SelectNet provider Average number of days to reach maximum medical improvement: 15 days less with a SelectNet provider For more information, please see the section titled Medical Cost Management on page

17 Changing Physicians An injured employee has the right to change physicians. There are two avenues the worker can follow in order to make a change. Option 1: To make a one-time change in treating physician, the injured worker must provide notice within 90 days of the injury but before the injured worker reaches maximum medical improvement. The request must be in writing and submitted on the approved Division of Insurance form. The new provider must be on the employer s designated provider list. The injured worker must notify Pinnacol and the initial treating physician. Option 2: An injured worker may obtain written permission to change treating physicians after the initial 90-day period. Requests must be made in writing. Pinnacol has 20 days from the mailing of the request to respond or the request is automatically approved. Medical benefits There is no limit to the amount of medical benefits that can be paid on a claim if those benefits are reasonable and necessary to cure and relieve the effects of the injury. Medical fees are paid according to a set fee schedule. Medical providers must accept the fee schedule; Pinnacol s SelectNet contracted providers accept negotiated discounted rates. Providers cannot charge the injured worker for any difference between the payment according to the fee schedule and the actual billed charges. Please alert Pinnacol if a provider sends an injured worker a bill for any difference. Compensation benefits The amount and duration of compensation to an injured employee for time lost from work depends on whether the worker s disability is (a) partial or total, and/or (b) temporary or permanent. Payment is usually made directly to the injured worker. Benefits are tax exempt. Certain workers compensation lost-wage benefits may be subject to reduction or revision if the worker is drawing Social Security, unemployment, or other benefits. Denied claims If a claim is denied, or if an admission of liability is felt to be incorrect, the injured worker or employer may request a hearing before the Division of Workers Compensation. If either party is not satisfied with the hearing decision, further appeal is possible, subject to strict time limitations. Hearings must be conducted within 80 to 100 days of the date of application. Pinnacol represents policyholders during these hearings. Compensability is one issue for which an expedited hearing can be conducted. Expedited hearings must take place within 40 days of application. Reopening claims A claim that has been closed may be reopened if the worker s condition worsens or the disability increases. This is subject to statute of limitations. If the claim has been settled in full, it cannot be reopened. Contact your claims representative for more information. As long as the claim is in the workers compensation system, the worker is not responsible for the medical bills. In cases where the claim is denied, the injured worker becomes responsible for payment. All medical bills must be paid by Pinnacol. Even if you have a deductible plan, Pinnacol must pay the bill first. You will then be billed for the deductible amount. Please see the section titled Discounts on page 10 for more information about deductible plans. 15

18 RETURN-TO-WORK A return-to-work program involves modifying the job to meet the injured worker s abilities, or transferring the worker to another suitable job. The goal of a return-to-work program is to bring the employee back to a position that meets physical restrictions set by his or her doctor. Modified duty positions generally are not permanent. They are temporary transitional jobs the worker performs while recovering. If a modified duty position approved by the treating physician is formally offered to the injured worker, the worker must accept the job or face losing compensation benefits. If the modified duty position pays less than the worker s regular pay, the two-thirds difference will be covered by the compensation benefits. There are certain procedures to be followed when offering modified duty. Your Pinnacol return-to-work specialist can help you determine appropriate modified duty. Pinnacol provides resources and a plan of action for employers and their employees when faced with workplace injuries. These include: Return-to-work programs Written guidelines are provided to employers, outlining a step-by-step process for effective claims management. A CD-ROM is also available with detailed instructions and resource documents. In addition, Pinnacol offers several returnto-work classes during the year. Modified duty task identification Return-towork specialists have identified modified tasks within Colorado s major industries. For those industries not addressed, a return-to-work specialist can visit your workplace to help identify appropriate tasks. Modified duty assistance Return-to-work specialists will assist employers in formally offering modified duty to their injured employees. Ergonomic evaluations A return-to-work specialist will evaluate your injured worker s workstation and make recommendations that comply with ergonomic standards. Train the trainer Return-to-work specialists are available to visit your site and train key personnel on such issues as properly adjusting workstations and identifying modified duty tasks. AUDITING Every Pinnacol Assurance policyholder is audited annually to ensure the premium paid is accurate according to actual payroll and classification code, and to keep the competitive business environment fair. There are three types of audits: Self audits Audit forms are mailed to policyholders to be completed and mailed back to Pinnacol, or the policyholder can complete the report online at (click on Pinnacol ServiceLink ). Field audits A Pinnacol audit representative visits the policyholder at the location where the business records are kept to complete the audit. The process usually takes less than two hours. 16

19 Office audits Audits may be conducted at the Pinnacol office by appointment. Most often, these involve policyholders wishing to renew canceled coverage or close their policies. Audit documentation To make the audit process faster and easier, you should expect to reference or have available certain documents, such as: Payroll records for the audit period Individual earnings records Quarterly or annual payroll tax and unemployment reports submitted to the State and Federal government Reports that show payments to subcontractors Documentation for subcontractors such as certificates of workers compensation insurance Additional records may be requested as needed to complete an accurate audit. If you need help with your Pinnacol audit, call our customer service team at or LEGAL SERVICES Most claims are legitimate and reasonable. For those that are not, Pinnacol Assurance provides attorneys to defend against and investigate questionable claims. Claims may be contested for the following reasons: The claim falls into a gray area legally or medically. The law may be ambiguous in regard to a particular case, or it may be unclear if the medical problem was caused by the worker s employment. The facts of the case are in dispute, such as whether or not the worker was really injured, if the accident occurred on the job, or if the worker was injured as severely as alleged. Hearings Pinnacol s attorneys will file the appropriate documents on your behalf. The party applying for a hearing has the opportunity to list issues and witnesses he or she wishes to present before the judge on the application for a hearing. The party responding to the application has the same opportunity to list issues and witnesses necessary to defend against the allegations. You will receive a copy of our application and any response. A notice of the hearing is sent to all parties at least 30 days prior to the hearing. It may or may not be necessary for you to attend. Settlements Pinnacol may choose to settle disputed claims before they reach the hearing process. Cases are reviewed to determine the advantages of closing a case by settlement and recommendations are made regarding the terms to be offered to the parties involved. If a claim is settled, any scheduled hearings will be canceled. 17

20 LOSS PREVENTION Loss prevention is essential to keeping premiums at their lowest possible level. It involves a combination of preventing injuries and holding down medical costs. To offer personalized service and convenience to policyholders, our loss prevention staff is located throughout Colorado and focus on specific geographic areas. Pinnacol also has many specialists on staff including construction and ergonomic specialists, and industrial hygienists. Preventing injuries With your involvement, a comprehensive safety program can be tailored to meet the needs of your organization. With an effective program and commitment from top management, your company should achieve the following results: Fewer accidents Reduced workers compensation costs Higher employee morale Less risk of lawsuits Enhanced compliance with federal, state, and local regulations Safety program development Safety consultants can assess individual business needs and make recommendations to reduce losses and enhance your safety program. Loss analysis Your safety consultant can assist you in identifying injury trends and suggesting corrective action to minimize risks. Train the trainer Safety consultants are available to visit your site to provide train the trainer programs for your supervisors and/or safety committee on such issues as ergonomics, accident investigation, back safety, hazard communication, and a variety of construction safety topics. OSHA compliance assistance Safety consultants can assist with questions and help you assess and correct potential OSHA compliance issues. Pinnacol s in-house construction industry specialists also teach the OSHA 10-Hour Construction course across the state to help employers in the construction industry meet OSHA requirements. Information resources Loss prevention videos, tool box talks, brochures, posters, and other resources are available to policyholders, at no cost. Here are just two examples of innovative tools we ve developed to help policyholders keep employees safe and save money: Slips, Trips, and Falls Prevention Kit This turnkey safety program, available at no cost to all policyholders, has everything you need to educate employees about slip and fall injuries, including topics and talking points for safety meetings; tabletop and PowerPoint presentations; posters and fact sheets; paycheck stuffers; and more. Some policyholders have seen claims costs drop as much as 67 percent by implementing this program. Loss Prevention CD This easy-to-navigate CD contains information, in English and Spanish, on OSHA compliance; cost containment certification; safetyrelated topics categorized by hazard and industry; sample safety programs and safety rules, and safety training materials. You can also access this information through Pinnacol Online. For more information on these and other no-cost loss prevention resources available from Pinnacol, contact 18

21 your Pinnacol safety consultant at or Safety seminars Pinnacol conducts seminars to assist with your safety program. To view our current seminar schedule and register for seminars online, visit our Web site at www. pinnacol.com, or call Pinnacol at or , extension Online safety training Online learning allows your employees to receive valuable safety training without stopping operations. Whenever it s convenient, employees can visit to access safety training. Pinnacol has partnered with ClickSafety, a nationally recognized online training provider, to offer: More than 180 courses including industry-specific and general courses Online comprehension testing for each course Many courses are offered in Spanish Awareness courses lasting from six to 15 minutes Fundamentals courses lasting from 30 to 90 minutes Comprehensive training such as the 10-Hour OSHA class 24-hour access, 365 days a year Classes are self-paced. If an employee has to stop in the middle of training, he or she can resume the class at a later date without having to start over again. Every course has a test at the end. Employees must score 100 percent to pass. If the score is lower, they will be given a review of the program and another chance on the test. Courses are offered to Pinnacol policyholders for nominal fees. To get started, visit click on Online Safety Training. Construction-related courses such as Fall Protection, Confined Spaces, Forklift Operator Certification, and many others 19

22 MEDICAL COST MANAGEMENT SelectNet is Pinnacol Assurance s preferred provider network. Designating your two medical providers is the most important step any employer can take to control the medical costs of a claim. 20 The medical provider makes decisions about the extent of the injury, when the employee can return to work, if modified duty can be offered, and if any permanent impairment was suffered. By designating the two providers employees must see for work-related injuries, you can achieve better management of health care services and establish a direct communication link with the provider. This is important in getting employees back to work. The designated providers you select can give advice on what the employee can safely do until recovery is complete or maximized, whether through reassignment, reduced hours, or job modification. SelectNet To assist you with choosing your two designated medical providers, Pinnacol has a statewide network of providers. SelectNet is comprised of doctors, clinics, hospitals, occupational medicine specialists, ancillary service providers, and pharmacy services. These network providers understand the special needs of treating patients in the workers compensation system. Pinnacol s medical operations team evaluates SelectNet providers to ensure managed care principles are used and employer communications are implemented. Some of the benefits of designating a SelectNet provider include: Premium discount: 2.5 percent Average medical cost per claim: $1,200 less with a SelectNet provider Average number of days missed from work: 12 days less with a SelectNet provider Average number of days to reach maximum medical improvement: 15 days less with a SelectNet provider This is because SelectNet providers: Understand and focus on work-related injuries and their treatment Deliver quick access and timely services through specially designed care settings Ensure efficiency by coordinating all aspects of care such as rehabilitation and pain management Know the workers compensation system, including special medical and legal considerations Help employers achieve financial and productivity benefits by returning patients to the workplace as soon as their recovery safely allows Emphasize proactive communication, often conversing directly with employers about patient care A full directory of SelectNet designated providers with search and mapping capabilities is available online. Go to click on Pinnacol ServiceLink, then click on SelectNet Directory Search. To designate your two medical providers, notify your employees and Pinnacol in writing or over the telephone. Please provide your company name, policy number, and name of the provider(s). For more information on SelectNet or on designating medical providers, call customer service at or Pharmacy benefits prescription program Pinnacol and Express-Scripts have partnered to provide prescription management to injured employees. The program covers the medication from the first time the injured employee receives treatment from a medical provider through the First Fill card, and thereafter through a pharmacy card.

23 Pinnacol policyholders can give injured employees the First Fill form when the injury occurs. This form allows injured employees to receive their medication without having to pay for the medication up-front. Contact your underwriter if you want to have these forms to give to injured employees. Express-Scripts mails a pharmacy card to the worker when a claim is filed. The card is good at more than 90 percent of the pharmacies in Colorado. Injured employees receive their injury-related medications without having to pay up-front, and Express-Scripts bills Pinnacol for the medication dispensed. Please inform your injured employees of the prescription process and ask them to reference Express-Scripts group number Pinnacol when presenting their pharmacy card for medication. You can search for participating pharmacies by going to the Pinnacol Web site. Click on Pinnacol ServiceLink and then SelectNet Directory Search. If you have questions about the pharmacy benefits process, call your underwriter, claims representative, or Pinnacol customer service. FRAUD PREVENTION AND DETECTION To keep your claims costs down, Pinnacol s special investigations unit is dedicated to actively investigating suspected cases of injured worker fraud, employer fraud, and medical provider fraud. Injured worker fraud may include working while collecting benefits and making false medical statements to receive benefits. To prevent injured worker fraud, you can: Make pre-employment screening part of your company s hiring process. Make safety a priority and document all incidents of unsafe behavior. Establish a reward system for safe behavior and recognize honesty among employees. Circulate articles and display posters pertaining to fraud. Investigate and document all instances of suspected fraud. affects the premium rates all employers pay. Examples of employer fraud include under-reporting payroll, misrepresenting the nature or volume of a company s business, and altering Certificates of Insurance. Medical provider fraud includes actions such as charging for visits, care, or treatments not received by the injured worker, as well as falsifying patient information. Pinnacol has a free poster available for employers to help educate employees about the consequences of fraud. To order this poster, call customer service at or Report suspected cases of fraud to the Pinnacol Fraud Hotline at or Employer fraud costs all employers. Not only does it give some employers an unfair advantage, but also 21

24 GENERAL DIVIDEND You work hard to make your business safe for your employees. Those efforts can earn you cash back. As a Pinnacol policyholder, you have the opportunity to earn a general dividend by maintaining a safe workplace and keeping your losses low; in turn, this contributes to Pinnacol s surplus. Policyholders who meet the following criteria qualify for a dividend: Pinnacol policy must have been written during the general dividend calculation period, which is approximately two years before the distribution date. For example, the May 2007 distribution used policies written between June 2005 and June Premium amount and loss ratio performance must have contributed to Pinnacol s surplus. Policyholder must have a low loss ratio. Loss ratio is a policyholder s total claims costs compared to the amount of premium paid. You can keep your policy s loss ratio low through effective safety, return-to-work, and claims management practices. Pinnacol offers a variety of services and materials that can help. Although general dividends cannot be guaranteed, we will continue to maintain efficient and entrepreneurial business practices so we remain financially strong and are in the best possible position to pay a general dividend each year. ONLINE POLICYHOLDER SERVICES Pinnacol s Web site, allows policyholders to file injury reports, manage claims, and access a host of other services. Pinnacol Online for policyholders Pinnacol Online is a Web-based information service that enables policyholders to access real-time policy and claims information. To ensure security, registration is required. Pinnacol Online provides 24-hour access to: Policy information Endorsements Financial transactions Rating details Audit results Certificate history Claims information Claim status Accident and injury details Summary of payments and reserves Medical payment details Indemnity payment details Summary claims reports Standard claims reports 22

25 Raw claims data download features Claims notepad Pinnacol team contacts SelectNet Provider Directory search Pinnacol ServiceLink Pinnacol ServiceLink provides customers another option for common service requests and does not require registration. Pinnacol ServiceLink users can: Apply for insurance Report an injury Finish an incomplete injury report Print a copy of the First Report of Injury Submit claim wage information Request a Certificate of Insurance Search the SelectNet provider directory Complete an audit report Complete a payroll report Reprint a payroll report Pay premiums by electronic funds transfer Online safety training Online learning allows your employees to receive valuable safety training without stopping operations. Whenever it s convenient, employees can visit to access safety training. Pinnacol has partnered with ClickSafety, a nationally recognized online training provider, to offer: More than 180 courses including industry-specific and general courses Construction-related courses such as Fall Protection, Confined Spaces, Forklift Operator Certification, and many others Online comprehension testing for each course Awareness courses lasting from six to 15 minutes Fundamentals courses lasting from 30 to 90 minutes Comprehensive training such as the 10-Hour OSHA class 24-hour access, 365 days a year Classes are self-paced and many are offered in Spanish. If an employee has to stop in the middle of training, he or she can resume the class at a later date without having to start over again. Every course has a test at the end. Employees must score 100 percent to pass. If the score is lower, they will be given a review of the program and another chance on the test. Courses are offered to Pinnacol policyholders for nominal fees. 23

26 SEMINARS AND PUBLICATIONS Would you like to know more about the issues discussed in this guide? Attend one of Pinnacol s seminars, conducted throughout the state, or request one of our many brochures. Seminars Pinnacol s seminar speakers are experts in Colorado workers compensation. They provide real world information about claims management, safety, return-towork, OSHA compliance, and other topics to promote workplace safety and premium savings. To view our current seminar schedule and register for seminars online, visit our Web site at com. Or, call Pinnacol at or , extension Newsletters compensation costs. These newsletters can also be viewed and downloaded at Brochures Pinnacol publishes numerous brochures designed to help policyholders develop safety programs, save money, and learn more about workers compensation insurance. To view a sample of our brochures and to download PDF versions, go to To order hard copies or request a complete list of our brochures, call customer service at or Pinnacol mails a quarterly newsletter, Focus, to our policyholders. The content provides practical tips on how to increase worker safety and manage workers RIGHT TO PRIVACY Pinnacol appreciates your business. We also respect your right to privacy. We obtain information from you and from other sources and use that information to process and maintain policies and claims. We do not give that information to anybody else for any other reason, except as required by law. We do not share customer information with outside companies for the purpose of selling their products and services to you. For more information on how Pinnacol ensures the security and integrity of customer information, or if you have any questions about our policies on privacy, please contact us at or

27 WORKERS COMPENSATION TERMS Know the terms This handy guide will help you conquer the workers compensation lingo. Please call Pinnacol s customer service team with any questions. accident year losses Total losses for all claims/ accidents during a given 12-month period. annual policy fee (APF) A premium charge added to all policies to cover the expense of issuing, maintaining, and auditing the policy. audit An annual survey of the financial records of a person or organization to determine exposures, limits, premiums, etc. average weekly wage (AWW) Gross weekly wages earned at the time of injury. benefits Includes the medical and compensation costs that could be paid on a claim. indemnity benefits Compensation benefits paid to an injured worker. This consists of wage replacement benefits called temporary disability and compensation for permanent functional impairment called permanent disability. medical benefits All medical-treatment costs related to a claim, and considered reasonable and necessary, to cure and relieve the effects of a workrelated injury or illness. case management A system of medical communication where the treating physician(s), the employer, and the patient are all informed of medical decisions. The designated medical provider is the gatekeeper who ensures all treatment and referrals are accomplished in a timely and cost-effective manner, and all involved parties are informed of plans and progress as the case continues. Certificate of Insurance Evidence that an insurance policy has been issued. It shows the amount and type of insurance provided. claim A demand by an individual or corporation to recover, under a policy of insurance, for a loss. claims representative A person who investigates and determines the insurance company s liability for loss when a claim is submitted. In addition, the claims representative is responsible for the delivery and management of benefits on compensable claims. classification code The premium rating category for a type of business. compensable A determination that an injured worker sustained an injury in the course and scope of employment. Only a compensable injury qualifies for workers compensation benefits. designated medical provider A medical provider chosen by the employer to treat injured employees. Ideally, the designated provider has knowledge of the Colorado workers compensation system and its fee schedules, is decisive on maximum medical improvement (MMI) determinations, communicates with the employer on such issues as work restrictions and return-to-work, and coordinates all medical care by acting as the case manager. employers liability coverage This coverage is provided under the basic workers compensation policy and pays on behalf of the insured (employer) all sums which the insured becomes legally obligated to pay as damages for work-related injuries, but is determined not to be subject to workers compensation law. experience rating The policyholder s past loss experience is used to price future terms of insurance. The rating compares the experience of an individual business with the average experience for the same type of business. anniversary rating date The normal date that a risk is due for rating. This date generally coincides with the policy s effective month and day. For multiple policy risks with varying effective dates, the 25

28 Anniversary Rating Date is determined by the rating organization. experience modifier, or mod The multiplier resulting from rating the claims experience of a business. The mod represents either a credit or debit, which is applied to the premium before discounts. experience rating worksheet, or mod worksheet The calculation of the experience rating for a specific business using established formulas. fee schedule A schedule enacted by the Division of Workers Compensation director to establish maximum allowable fees for health care services under the Workers Compensation Act. hazard group A rating system used by the National Council of Compensation Insurance (NCCI) to indicate the frequency and severity of losses to be expected for a particular classification code. impairment ratings Medical definitions translated to numerical values for purposes of determining dollar awards in cases involving permanent disability. Such values may be scheduled or whole person percentages and must be based upon the Revised Third Edition of the AMA Guidelines of the Evaluation of Permanent Impairment. loss ratio Losses incurred expressed as a percentage of earned premiums. losses Monies paid for medical and compensation costs resulting from claims incurred. maximum medical improvement (MMI) A point in time when any medically determined physical or mental impairment, as a result of injury, has become stable and further treatment is not reasonably expected to improve the condition. modified duty, or light duty An injury may prevent an employee from returning to his/her normal job for some period of time. However, the employee may be able to return to the workplace if his/her duties are modified and the treating physician approves. This is a beneficial alternative for all concerned and an important cost containment strategy. permanent disability A benefit designed to compensate an injured worker for permanent functional impairment as defined by the authorized treating physician and usually limited to the part of the body that is affected. May be a permanent partial disability (PPD), such as a scheduled or whole person impairment, or permanent total disability (PTD). Permanent total disability is the only permanent impairment that includes any loss of future earning capacity. premium The amount of money an insurance company charges to provide coverage. earned premium The premium for that part of the policy period that has already passed. For example, halfway through a policy period, the company has earned half of the premium. estimated annual premium The total premium with all charges and discounts. The term estimated means before the premium audit. manual premium The subtotal of the premium for each classification code plus any increased limits of employers liability charge. modified premium The premium subtotal after an experience rating. standard premium Estimated annual premium minus the policy fee. rate The dollar amount charged by an insurance carrier for each $100 of payroll paid to the insured s employees. Each classification code assigned to a business has a corresponding rate. Rates are used to determine premium along with applicable discounts, an experience modification factor and policy charges. reserves Estimates of the total amount the insurance company will pay for reported and unreported claims. return-to-work (RTW) A process to help employers bring their injured employees back to work while still recovering from a work-related injury. 26

29 scheduled injury An injury involving impairment of bodily extremities such as arms, legs, and hands. Permanent disability benefits are paid according to an injury schedule outlined in the Workers Compensation Act. SelectNet Pinnacol s occupational health network of primary care, specialists, ancillary providers, and hospital providers located throughout Colorado. standard exception classification Certain classes of employees who are common to many business types, and for whom special rate classifications have been established. These include clerical office employees, drafting employees, drivers, chauffeurs, outside salespersons, collectors, messengers, and telecommuters. subrogation The transfer to the insurance company of the insured s right to collect damages from another company. The insurance company, upon payment of a loss to the insured, is entitled to the insured s legal and equitable rights against third parties. These rights are only those related to the loss, and the company is only entitled to the extent of the loss payment. temporary disability A disability category designed to compensate an injured worker for actual temporary wage loss attributable to a work-related injury. May be a temporary partial disability (TPD) or temporary total disability (TTD). underwriter A person responsible for accepting risks and premium and determining the amount of insurance the company will write on each acceptable risk. utilization review A review process which can be used by either the insurer or the injured worker to determine whether medical services provided under the Workers Compensation Act are reasonable and necessary according to accepted standards of professional care. whole person Whole person injuries include impairment to the neck, head, or torso and include any injury not specifically enumerated in the schedule. Payments are made based upon a statutory formula which factors in age, temporary total disability rate, and medical impairment rating determined by the physician. workers compensation All states have laws providing compensation to a worker injured on the job, whether or not the worker or employer has been negligent. The workers compensation laws apply to all individuals, except those specifically excluded under the Workers Compensation Act. workers compensation insurance The statutory obligation of an employer to provide benefits for employees as required by law, including medical expenses and benefits to cover injured workers loss of earnings. treatment protocol Predetermined, accepted patterns of diagnosis and treatment for common, workrelated injuries. 27

30 HOW TO REACH US Offices 7501 E. Lowry Boulevard Denver, CO Fax: Toll free fax: Horizon Court, Suite Grand Junction, CO Fax: Online By Telephone Phone number or Company Directory Option 4 Spanish Option 8 Fax number or Legal Team Direct Fax Fraud Hotline or Certificate of Insurance Request Loss Prevention/Safety Certification and Programs Return-to-work programs TTY/Communications Teletype for the Deaf

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