Payments for: Medical expenses Disability (loss of income) Rehabilitation Death (to survivors)

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Millicent Davidson
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1 Advanced Workers Compensation Insurance Seminar Sponsored by CPE INSTRUCTIONS Polling Questions As such, you CAN NOT get CPE credit if you are watching as a group on one computer. Questions will be left on the screen for about 30 seconds to give you time to select an answer. 4. Upon meeting the CPE participation notes above, you will receive an from NOTE: You can download a copy of this presentation at : 2 April 2014, ADP Inc. 2 Agenda Why is Workers Compensation needed? Why is Workers Compensation needed? What s covered? Compensation benefits Employer coverage options Understanding the Workers Compensation Form The premium calculation How you can best assist your clients ADP Pay-by-Pay program Insurance to cover the medical and economic costs of employment-related injury Protects employer (business entity) from financial consequences of employment- related injuries and catastrophic loss. 2 April 2014, ADP Inc. 3 2 April 2014, ADP Inc. 4 What is Covered by Workers Compensation? Accidental injuries Injuries arising out of, or during, an individual s employment Occupational disease Resulting from causes or conditions characteristic of, and pertaining to, the particular trade or occupation No-fault coverage What Benefits do Employees Receive? Payments for: Medical expenses Disability (loss of income) Rehabilitation Death (to survivors) 2 April 2014, ADP Inc. 5 2 April 2014, ADP Inc. 6 1

Upon meeting the CPE participation notes above, you will receive an email from NOTE: You can download a copy of this presentation at : www.smartpros.com/adpevents 2 April 2014, ADP Inc.

2 How Can an Employer Purchase This Coverage? Private insurance High-risk companies: Competitive state funds Assigned risk Monopolistic state funds Self insurance Two Separate Coverages 1. Coverage A - Workers Compensation Statutory benefits 2. Coverage B - Employer s liability Common law liability involving employee injury 2 April 2014, ADP Inc. 7 2 April 2014, ADP Inc. 8 What Does Employer s Liability Insurance Cover? Injuries to employees may affect others and result in a negligence claim being made against the employer : Third-party suits Loss of consortium Consequential bodily injury Polling Question #1. 2 April 2014, ADP Inc. 9 2 April 2014, ADP Inc. 10 A Look at the Workers Compensation and Employer s Liability Policy Information page Policy form* Mandatory endorsements* Oti Optional endorsements * Same provisions, regardless of carrier or State 2 April 2014, ADP Inc April 2014, ADP Inc. 12 2

8 What Does Employer s Liability Insurance Cover?

3 Basic Calculation annual payroll per $100 Class Rate X by State = 2 April 2014, ADP Inc April 2014, ADP Inc. 14 Payment Timeline Polling Question #2. Traditional: % down payment Max of 10 installments End of policy: insurer requests new estimate for next 12 months Final audit based on actual payrolls Payment for any additional premiums due in full 2 April 2014, ADP Inc. 16 Client Issues with Traditional Workers Comp Payment Process Initial premium deposit (25-100%) creates cash flow problems Failing to manage timely installment payments could lead to loss of coverage Final audit can create additional cash flow problems How can you help your clients? Ensure Workers Compensation Coverage is in place to protect business assets. Ensure Workers Compensation is properly calculated Ensure payment of actual premiums based on appropriate payrolls Ensure the audit process is properly managed. 2 April 2014, ADP Inc April 2014, ADP Inc. 18 3

4 Coverage is in Place Coverage is mandatory in most states and required by all due to the potential catastrophic loss potential and liability issues associated with Employers Liability Must be in place when 1 st employee is hired Coverage for employees who travel out of state Review Employer Liability Limits for adequacy Coverage needs to be renewed annually payments both installments and audit payments must be timely to avoid policy cancelation. Assignment of Classifications Make sure client accurately assigns payroll to each classification. This will be verified during the final audit. Make sure your clients handle employees correctly For employees with multiple positions, the highest-rated job classification applies to entire payroll for that employee When classification disputes arise, the Workers Compensation rating bureau can resolve them 2 April 2014, ADP Inc April 2014, ADP Inc. 20 Subcontracted workers Coverage for subcontracted employees is responsibility of the employer unless the subcontractor provides written evidence of coverage Polling Question #3. 2 April 2014, ADP Inc April 2014, ADP Inc. 22 is the basis for premium calculation Make sure the policy payroll accurately reflects the payroll for the business One payroll limitation is for Overtime Overtime is calculated as straight time for the workers compensation audit process. Handling the Owner/Officer Owner/ Officer - Inclusion / exclusion decision Determined by rules established by each state Rates for owner/officer job classification can be very low Claims against personal health coverage may not cover work related injuries and claims paid by that coverage can reduce lifetime benefit Deductibles and co-payments may apply 2 April 2014, ADP Inc April 2014, ADP Inc. 24 4

audit payments must be timely to avoid policy cancelation. Assignment of Classifications Make sure client accurately assigns payroll to each classification.

5 [ annual payroll Determine Accurate Final ] $100 of Class Rate X by State = Actual = Actual = Additional Return ADP Pay-by by-pay Option Improves cash flow Eliminates the deposit premium requirement payment as business processes payroll Minimizes audit surprises is calculated l off actual payrolls processed Convenience Client does not process insurance company billings for Workers Compensation premiums Minimizes risk of cancellation for nonpayment 2 April 2014, ADP Inc. 26 What we Covered Why Workers Compensation is needed Benefits and coverage How premiums are calculated and collected Adit Audit process How you can assist your clients Polling Question #4. 2 April 2014, ADP Inc April 2014, ADP Inc. 28 Thank You 2 April 2014, ADP Inc. 29 5

Workers Compensation premiums Minimizes risk of cancellation for nonpayment 2 April 2014, ADP Inc.

Workers Compensation and Employers Liability (Lecture 13)

Workers Compensation and Employers Liability (Lecture 13) Overview of Lecture 13 (Chapter 9, CPCU 4) I. Introduction II. III. IV. Employers Liability Under Common Law State Workers Compensation Laws Workers