Self-Insured Workers Compensation Program Frank Ruel Copyright 2010 Raytheon Company. All rights reserved. Page 1
Agenda Raytheon Company Overview Integrated Disability Program Workers Compensation Program Self Administration Benefits Return to Work Conclusion Page 2
WHO WE ARE A technology and innovation leader specializing in defense, homeland security and other government markets throughout the world 2009 net sales: $25 billion 75,000 employees worldwide Headquarters: Waltham, Massachusetts A global leader in technology and innovation Page 3
OUR VISION To be the most admired defense and aerospace systems supplier through world-class people and technology. Ensuring the success of our customers Page 4
Raytheon Business Headquarters Integrated Defense Systems Tewksbury, MA Space and Airborne Systems El Segundo, CA BD and Raytheon International Operations Rosslyn, VA Global Headquarters Waltham, MA Network Centric Systems McKinney, TX Technical Services Reston,VA Missile Systems Tucson, AZ Intelligence and Information Systems Garland, TX 75,000 employees; 2009 net sales: $25 billion Page 5
Organization Chart Raytheon CEO General Counsel SVP HR VP - Corp Services VP - Benefits, Comp, PD, GHR Risk Management EHS Integrated Disability Programs Page 6
Integrated Disability Program at Raytheon Workers Compensation Self-Insured and self-administered in MA and RI Claims administered by Liberty Mutual nationwide (except MA/RI) as well as for U.S. employees working overseas Short/Long-Term Disability Self-Insured throughout the U.S. for STD and LTD Employees can purchase optional coverage for higher benefit rates and long-term disability Claims are handled by MetLife. Unemployment Compensation (Claims) Claims administered by TALX Page 7
Raytheon Disability Program Absence Management Goals Return to work initiatives Early and medically safe Whether Occ. or Non-Occ. Plan RTW- Lead discussions Corp resource to consult and train re: Absence Management / productivity HR, management, and front-line leaders Safety and medical staff Develop innovative RTW programs Engage medical community and Raytheon Physicians Page 8
Raytheon Workers Compensation Program (MA & RI) Self-Insured Raytheon funded for workers compensation coverage Excess coverage through Liberty Mutual over retention level Self-Administered In-house Claims processing investigation, forms, claims decisions Bill Payment Utilization Review (UR) Loss Prevention Litigation Management Outside Counsel Other Resources On-site Clinics staffed with nurses and M.D. s Medical Consultants Vocational Rehabilitation Specialists Page 9
Advantages vs. Disadvantages of Self-Administration Pros Integration with the Business Access to Raytheon facilities and Supervisors (in-person) Working relationships with management & safety Employer databases Claim Analyst handles Conciliations Manage medical-only claims Integration of RMIS, Risktrac, MetLife Database, Medgate Relationships with Doctors TPA comparison Superior level of service Lower cost Cons Bonding requirements Personnel issues Overhead costs Head count IT costs Office Space Page 10
Raytheon Workers Compensation Program History Self-Insured as of 1/1/1992 Self-Administered e ed as of 1993 Currently cover about 15,000 employees (MA & RI) Union workforce ~ 2,300 Early 1990 s Union workforce ~10,000 Decreased claim volume due to: Reduction of touch-labor workforce in MA Proactive EHS initiatives WC reform Page 11
Paid Lost Work Days Insured vs. Self Insured 45 40 42 35 30 25 15 10 5 0 26 Insured 20 Self Insured 2009 Avg Duration Based on a 5-day work week Page 12
Average Lost Time Claim Cost Insured vs. Self Insured $35,000.00 $30,000.00 $31,287.29 $25,000.00 $20,000.00 Insured $15,000.00 $18,459.03 Self $10,000.00 $5,000.00 $0.00 3 YR AVG $ LT Claims 1/01/07-12/31/2009 Val 4/1/2010. Loss limit of 250k Insured Page 13
Average Expense Cost Insured vs. Self Insured $800.00 $700.00 $781.69 $600.00 $500.00 $400.00 $300.00 $200.00 $205.14 $100.00 $0.00 3 YR AVG $ Expense 1/01/07-12/31/2009 Val 4/1/2010 Insured Self Insured Page 14
Jurisdictional Difficulties No control of medical (choice of physician) High SAWW, high compensation rates MA Fee schedule - negotiated medical rates Fairly liberal ALJ s Js Difficult to get relief from SIF Legal issues Fee incentive for employee attorneys to file RTW can be lengthy legal process No cap on TTD Specific benefits Whole body disfigurement Very subjective system Forms, forms, forms! Page 15
Coordination of Benefits Share data with Raytheon's Health Insurance Carriers (self-funded) f d) Coordination of benefits with MetLife for STD/LTD Integrated Health Management (Mission:Health) Share WC data with unemployment for contract t employees Page 16
Getting Absent Employees Back to Work Temporary Job Accommodations Seek detailed restrictions Job rotation or alternative assignments Assistive devices and work station modifications Raytheon Works with MD s Physician RTW promptly in a medically appropriate and safe manner Physician tours of our facilities Raytheon Pre arranged fee arrangements for top notch Dr s who get it. Employee Page 17
The Employer Statement of Job Demands Outlines the physical requirements of the job Completed by the employee s supervisor Describes potential accommodations It is NOT a job description Can be forwarded to treating physicians Page 18
The Lost Time Intervention Team (LTIT) The worksite Return to Work Planning Forum Medical (RN/MD), HR, Voc Rehab Experts and Claims Reduced Hours and other accommodations are often used to ease return Clear communications to the absent employee is an absolute necessity Page 19
Conclusions Better service Lower claims cost (especially expense) Better RTW outcomes through integration ti with the business and personal relationships Innovative forum to develop and create tools for RTW Page 20