3 Reasons Businesses Shouldn’t Delay Filing Workers’ Comp Claims
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By Brad Dowling, Vice President of Workers' Comp
When an employee is injured or becomes ill while on the job, it’s critical for a business to report the incident as soon as possible. The fact is, an employer’s failure to file a workers’ compensation (WC) claim in a timely manner can substantially increase costs to the business, as well as create ill will among workers.
In general, employers must provide an injured employee with a claim form within 24 hours after the employee has given notice of an on-the-job injury or work-related illness.
The following are the top three reasons your business owner clients should never delay filing a WC claim.
Did you know? The median cost for claims reported in weeks one and two typically increase by an estimated 25%. In week three, claim costs increase to 35%, and in week four, costs jump another 12%.
1. Report lags can delay medical care and impede the claim process, causing delays and increasing claim costs.
Report lag is the number of days between the date an accident occurs (accident date) and the date the insurer receives notice of the accident (report date).
According to the National Council on Compensation Insurance (NCCI), the longer the lag time in filing a claim, the longer it will take to get employees the care they need. Claim delays can also impede the investigation process. Both of these issues can result in claims remaining open longer than necessary – increasing the chance of the business becoming subject to a litigation claim.
2. Late claim reporting can negatively increase insurance premium costs.
Because WC insurance rates are subject to an experience modification rating (EMR), an employer’s loss history will impact what the business pays for insurance. As mentioned previously, any delays in WC claim filing can increase claim severity and costs, which can cause insurance premiums to rise.
Best practices should include establishing a claim reporting protocol for all managers, supervisors and employees, making it clear that when an injury occurs, it should be immediately reported. In addition, businesses must maintain a hands-on approach to managing claims once they are open, ensuring they are being processed appropriately. Proactive measures should also include determining the cause of injuries and how to prevent future injuries that could further impact the businesses’ EMR.
3. Report delays can put the business in violation of state laws and result in costly penalties, fines and even criminal charges.
Each state’s WC system is different and has its own procedural rules that employers must adhere to. If they are not followed, the business could be in violation of the law. Employers should contact their state department of industrial relations or WC division to learn about WC laws where they conduct business, as well as review the Occupational Safety and Health Administration’s reporting requirements.
An injured employee can sue their employer in civil court if the business does not provide WC insurance. Today, some states have special funds set aside specifically to aid injured workers looking to sue employers that are uninsured.
Conclusion
Effective claim management can only begin once a claim is reported. And while the late filing of a WC claim by an employer won’t affect an employee’s benefits, it can correspond with other issues that may increase costs to the business — much of which may be prevented by early claim reporting.
It is critical for your business owner clients to know the importance of immediately reporting a WC claim. They should also know that it is required by law (in most states) to provide WC coverage for their employees at all times. Going without WC insurance, even for a day, could result in financial penalties and fines, as well as criminal charges and lawsuits.
Brad Dowling is VP of Workers' Comp of Builders & Tradesmen's Insurance Services, Inc., an Amynta Group Company.
Builders & Tradesmen’s Insurance Services Inc.
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