Ins Exam N - Workers Comp Flashcards
Exclusive Remedy Ins Program *
> WC COMPENSATION is an EXCL REMEDY INS PROGRAM
w/ one exception, injured EE cannot file a lawsuit even if employer is negligent
- if employer fails to carry WC ins, then EE may seek restitution thru court
State Workers’ Compensation Laws *
STATE WC LAWS MAY BE EITHER
- compulsory
- elective
COMPULSORY WORKERS’ COMPENSATION LAW
> States that covrg is required for every employer except for a few specified exceptions
State specific penalties assessed if employer fails to secure/maintain covrg
Most states have compulsory laws
Elective Compensation Law *
> PERMITS AN EMPLOYER TO REJECT COVRG
- if rejected, EE can sue under common law
EE HAS THE RIGHT TO REJECT ELECTIVE COVRG
- if rejected, EE has the right to bring action against the employer
Monopolistic State Funds
- Funding for WC Benefits
- to be insured against WC claims, the employer must buy covrg from the state fund
- Private Ins Cos are not allowed to compete against these funds
Competitive State Funds
- Funding for WC Benefits
- Give Employers a choice between purchasing WC Ins from a state fund or a private Ins Co
- State fund competes w/ private Ins
Self-Insurance Method
- Funding for WC Benefits
- Employer sets up a fund to pay WC claims and files evidence of its existence w/ the state WC authority
- Employer must handle benefit costs and claim expenses, as well as medical and legal servicesn
Benefits Provided *
WC laws vary from state to state, but in general they pay benefits in four categories
- Disability/loss of income benefits
- Medical benefits
- Survivor/death benefits
- Rehabilitation benefits
Disability/Loss of Income Benefits *
> Compensate EEs who are unable to wrk as the result of a work-related injury or occupational disease
Intended to replace a portion of lost income, but not all of it
Type of benefit depends on injury sustained
TOTAL DISABILITY - severe injury/disease
- Disability/Loss of Income Benefits
> a severe injury/disease that means EE can never wrk again in that particular employment
TOTAL DISABILITY - weekly cash benefits
- Disability/Loss of Income Benefits
> Weekly cash benefits are paid up to certain % (ie: 66 2/3%) of wage beginning after waiting period has been satisfied but lmtd to the state ave wkly wage
Most waiting periods range from 3-7 days; benefits begin after the waiting period has been satisfied and continue for a specific length of time depending on the classification of disability
a retro period is est for total disability cases; if the disability lasts longer than the retro period (ie 14 days), wages that were withheld during the waiting period are reimbursed back to injury party on a retro basis
Temporary Partial Disability *
- Disability/Loss of Income Benefits
> usually results in a restriction of duties but not a great deal of lost time b/c injury is relatively minor
compensation generally is lmtd to the difference between post-loss wages for the recovery period
Permanent Partial Disability *
- Disability/Loss of Income Benefits
> Incls loss of limb, sight, or hearing
Although injury does not result in an ability to wrk, injury never goes away
to compensate for this, law allows a scheduled benefit based on the extent of the injury in addition to the lost wages benefit
Medical Benefits
> pays cost of various types of medical svcs required b/c of an employmnt-related injury
Nearly any type of realted medical expense is covered
No upper dollar lmt nor is there a lmt on the period of time for which expenses will be paid
Benefits usually payable immediately
Survivor/Death Benefits *
> compensates a surviving spouse, children, or other relatives of an EE whose death results from a wrk-related injury or occupational disease
- provides indemnity pymnts (typically wkly) to surviving dependent spouse and children until - spouse remarries or children reach a specified age (usually 18yrs old)
survivor benefits generally incl a wkly benefit and a stipulated amount for funeral and burial expenses
Rehabilitation Benefits *
> Designed to assist injured wrkrs to return to wrk as soon as possible
Rehabilitation benefits usually paid in addition to wkly indemnity and medical benefits
Workers’ Compensation Liab Policy
> Contract consists of 2 types of covrgs
- Part I - WC
- Part II - Employer’s Liab
Part I: Worker’s Compensation *
- will pay for all medical expenses
- incls benefits required by W/C law
- Provides benefits for injuries and occupational disease suffered by EEs arising out of their employment
- must be from wrk-related causes
- non-work-related causes not cvrd under W/C law
- does not pay for pain and suffering losses
Injuries Not Covered
- Part I: Worker’s Compensation *
- Burden of proof on the employer
- Injuries not covered incl
- injury caused by the EEs willful intention to injure self or another
- injury sustained while intoxicated
- injury caused by EEs failure to use provided safety equipment
- pain and suffering
Part II: Employer’s Liability *
- Provides covrg to the insured for sums the insured becomes legally obligated to pay under common law b/c of a wrk-related injury or occupational disease
- Applies in situation that are not covered by W/C law
- An EE who is unable to collect W/C under state law may still sue the employer for damages
- Ex situations of this incl: xempt employmnts, illegal employments, and non-compensable injuries
Coverage is provided for the following:
- Part II: Employer’s Liability
- SUIT BROUGHT BY INJURED EEs, EVEN IN CASE OF GROSS NEGLIGENCE
- SUITS BROUGHT BY SPOUSES OR DEPENDENT OF INJURED WORKERS
- Legal defense costs for Employer
Basic Limit of Coverage Available
- Part II: Employer’s Liability
under this section is 100/500/100:
- $100k for BI
- $500k agg
- $100k for disease
PART III: OTHER STATE’S INSURANCE
- This covrg is provided by both sections of the W/C and Employer Liab policy
- Only applies if the states are listed in the dec
- Useful when an insured Co has EEs traveling in other states
PART III: OTHER STATE’S INSURANCE 2
- Other state’s covrg cannot be written to covr xposure in monopolistic states or countries
- Since these states regulate and provide compensation benefits, W/C ins must be purchased form a state-run insurer
- Insured must provide notice to the insurer as soon as wrk begins in a new state
Part V: Premium *
- Rates for ea wrk classification are dvlpd by the National Council on Comp Ins and are based on the type of wrk EEs perform and their relative xposures to wrk-related injuries
- referred to as the book rate, or manual rate
- W/C rates are based on per $100 of payroll for ea applicable job classification
Premium Audit *
- Since the initial W/C premium is a deposit prem (a prem paid in advace based on est factors), a prem audit is conducted @ the end of the policy period
- This audit takes into acct all of the actual factors involved so taht a final prem can be determined
Part I: Workers’ Compensation Exclusions
- W/C policies will not make pymnts for:
- SERIOUS and WILLFUL MISCONDUCTED BY the EE
- Employmnt of a person hired in violation of the law
- Failure to comply w/ a health or safety regulation
- Discharge or discrimination against an EE in violation of W/C laws
Workers’ Compensation Assigned Risk Pans *
An assigned risk, or residual mrkt, plan is a risk pooling arrangmnt for employers that cannot obtain W/C ins thru the normal channels
- commonly referred to as the W/C assigned risk pool
Worker's Compensation benefits include: A. unlimited medical expenses B. funeral expenses C. rehabilitation benefits D. All of the Above
All of the Above
