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RMI Final > Workers Compensation Part 1 > Flashcards

Workers Compensation Part 1 Flashcards

1
Q

WC Statute

A
  • Obligates ER to pay specified medical disability, rehab and death benefits
  • Job Related
  • Regardless of Fault
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2
Q

Benefit Requirements

A
  • Must arise out of and in the course of employment
  • Occupational Disease covered
  • Cause and Effect relationship
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3
Q

Benefits Provided

A
  • Medical
  • Full and unlimited medical expenses benefits of covered injury or disease
  • First Dollar Coverage: no deductible or co-insurance
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4
Q

Disability

A

Work will eventually resume all duties

1) Temporary Partial Disability:
2) Temporary Total Disability
3) Permanent Partial Disability
4) Permanent Total Disability

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5
Q

Temporary Partial Disability

A

prevents injured worker from performing some job duties for a definite period of time

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6
Q

Temporary Total Disability

A

unable to perform any job duties fora specific period of time

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7
Q

Permanent Partial Disability

A

Suffers an irreversible injury but can return to some work duty; lose an eye

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8
Q

Permanent Total Disability

A

They will never be able to perform job duties again

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9
Q

Disability Benefits

A
  • Loss of wages during injury period
  • Deductible: Waiting period
  • Paid Weekly
  • % of salary; varies by state
  • compensation also for losing specific body parts
    • Does not hinge on wage loss
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10
Q

Rehabilitation Benefits

A
  • Goal to return to work
  • Pay expenses for physical therapy
  • Can cut the cost of claims
  • Cuts costs/saves money
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11
Q

Death Benefit

A
  • Burial expense
  • Partial Replacement of worker’s former weekly wage
  • Varies based on the number and types of dependents
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12
Q

Out of State Law Application

A
  • When traveling in another state
  • File in the state injury occurred
  • File in state where employer/job is located
  • ## File in the state where the EE resides
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13
Q

What drives the decision on state to file?

A

State the pays the most

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14
Q

Methods to meet WC Obligation

A

1) Private Insurance
2) Assigned Risk Plans
3) State Funds
4) Self Insurance

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15
Q

Private Insurance

A
  • Pay premium: insurer pays and administers claims

- Highly experienced based

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16
Q

Assigned Risk Plans

A
  • Can’t acquire private insurance
  • Unable to meet insurer underwriting requirements
  • Poor experience
  • Varies by state
  • Usually a pool of business accepted by private carriers funneled via the state
  • Common with auto is both mandatory
17
Q

State Funds

A
  • Half of states have set up funds
  • Controlled by state but function like private insurer
  • Accept any good faith application by a state company
  • Some states compete with private carriers
  • Some states is only option
18
Q

Competitive State Funds

A
  • Some states’ funds compete with private carriers

- ER can buy from state or private carrier

19
Q

Monopolistic State Funds

A
  • Some states it is only option
  • Unable to purchase rom private carrier
  • North Dakota, Ohio, Washington, West Virginia, Wyoming, and Puerto Rico
20
Q

Self Insurance

A
  • Long tail (Non Volatile) appealing with time value of money
  • Allowed by state if financial capacity is demonstrated
  • Sometimes must post bond with state
  • Must also demonstrate an ability to properly administer a plan
  • Appropriate for ERs large and with good experience
21
Q

Self Insurance Challenges

A
  • ER often purchases excess coverage to cover a catastrophic loss when self insuring
  • Aggregate Excess: covers total losses past retention point to a stated limit and not tied to a specific location; only claims in total
  • Specific Excess: Retention Amount to a maximum
  • On per claim basis
22
Q

Policy - WC

A
  • WC + EL Policy
  • WC and ER Liability
  • Policy Form is filed and maintained most states
  • Not ISO
  • National Council on Compensation Insurance (NCCI)
23
Q

Policy: Part 1

A
  • WC
  • Pays for obligations required by law
  • Insurer also defends in a lawsuit
  • Also pays for a penalty to ER
24
Q

ER Penalty List

A

1) Willful Misconduct
2) Illegal Employment
3) Failure to comply with health and safety laws
4) Discrimination against any EE who files a WC claim

25
Q

Policy: Part 2

A
  • ER Liability
  • Pays for EE injury, not WC
  • 3rd party lawsuit
  • Family member lawsuit (loss of consortium); spouse injury asbestos
26
Q

Policy: Part 2 Exclusions

A
  • Injury outside US or Canada
  • Punitive damages due to illegal EE
  • Intentional bodily injury on part of Insured
27
Q

Policy: Part 3

A
  • Other state’s insurance
  • Extends WC and EL automatically to any state listed in section 3
  • Section 3A lists states currently operating
  • 3C are states you might operate
  • Must inform insurer when 3C star becomes active
  • If you enter state that is not on 3A or 3C - must notify insurer within 30 days
  • Why not just say all states; might not be licensed, some monopolistic, insurer must avoid states not licensed or monopolistic states
28
Q

Why not just say all states in WC policy?

A
  • might not be licensed,
  • some monopolistic,
  • insurer must avoid states not licensed or monopolistic states
29
Q

Stop Gap Coverage

A
  • Insured has operations in monopolistic state
  • State policies do not include Er’s liability
  • Can be part of your WC policy that applies to there states
  • Could also be part of your CGL
30
Q

Rating WC

A
  • MCCI files forms and endorsements for insurer in many sates
  • Some states have their own rating bureaus
  • Set tables used to create manual or “book rates”
  • Premium uses payroll as its basis
31
Q

Worker Classification

A
  • Identify group of EEs to set rate on appropriate risk
  • Governing classification is what best describes overall operation
    • Not all EEs fit into this description/Classification
    • Except in some situations; governing classification is what prevails in setting manual rates
32
Q

WC Premium: Experience Rating

A
  • Premium for particular insured is increased or decreed in future periods
  • Tied to the experience of the inured
  • Also tied to credibility of results; time and size
33
Q

WC Premium: Retrospective

A
  • Premium for an insured is increased or decreased in current premiums
  • Pay a minimum premium
  • Depending on results during policy period; refund or bill for additional premium
34
Q

WC Premium: Large Deductible Plan

A
  • Essentially self funding with catastrophic coverage
  • Allows insured to self insure without going through the state requirements to set up self insurance program
  • Not high deductible plan!
  • Range from $50,000 to $250,000 per claim
35
Q

Retrospective Good For?

A
  • Insurer who is concerned about a marginal account

- Insured that is confident that claims will be low

RMI Final (8 decks)

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