Transcript Document

NEASHRM
Workers’ Compensation
August 9, 2011
Table of Contents
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Basic Workers’ Compensation Rules
The Cost of Accidents
Benefits to Employees
Definitions and Provisions
Types of Injuries Covered and Excluded Claims
Choice of Physician
Adjudication of Claims
Available Defense and Case Studies
Fraud
Exclusive Remedy
Third Party Actions
Basic Arkansas Workers’
Compensation Rules
● Act 796 of 1993 became the law for Arkansas
Workers’ Compensation Laws effective July 1,
1993
● All employers with three or more employees
must carry workers’ compensation insurance or
be self-insured
● Insurance is purchased by the employer and
cannot be charged to the employee
● Coverage is provided through a workers’
compensation insurance policy or state
approved self-insured plan
● AWCC Form P must be on display at all
worksites
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Posting and Notification Requirements
● With the posting of AWCC Form P, employers have the right to
expect injured employees to provide written notice of any injuries
using AWCC Form N
● AWCC Form N advises employees of their rights and
responsibilities regarding their injury
● Employers must submit the First Report of Injury – AWCC Form
1 to their insurance carrier for each injury
● Insurance carriers report to the state for employers
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The Cost of Accidents
● Direct
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Medical
Indemnity
Insurance premium
● Indirect
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Attorney fees / court costs
Turnover
Lost productivity of tenured employee
Training/retraining
Lost productivity due to modified duty
Investigation time/paperwork
Machine/equipment/tool damage
Damage to facility
Personnel leaving work areas to assist injured
employee(s)
Shutting down entire facility in worst cases
Citations
Negative publicity from media and in community
Gossip
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Benefits to Employees
● Medical
● Temporary Total Disability
o Not to exceed two-thirds of the employee’s average weekly wage up to a
statutory maximum
o First installment due on 15th day after notice to the employer
o Compensation is not allowed for first seven days excluding the day of injury
• If a disability extends beyond the first seven days, compensation commences with
the 9th day of disability
o If disability extends for a period of two weeks, compensation is allowed
beginning the first day of disability excluding the day of injury
● Serious and Permanent Facial or Head Disfigurement
o Up to $3,500.00
● Permanent Partial Disability
o Scheduled Injuries
o Provisions for Vocational Rehabilitation
● Death Benefits
o Funeral Expenses
o Dependency Claims
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Definition of Employee
● “Employee” means a person, including a minor, where
lawfully or unlawfully employed under any contract of
hire, written or oral, express or implied, but excluding
agricultural farm laborers, State employees, or whose
employment is casual and not in the course of trade,
business, profession, or occupation of the employer
● Sole proprietors and partners are employees unless
they file written notice with the AWCC opting out
● Excludes persons who work while incarcerated
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“Statutory Employer” Provision
● When a subcontractor fails to secure WC
insurance, the prime contractor is liable for
compensation to subcontractor’s employees
● Primary contractor who becomes liable for
payment of compensation to an employee of a
subcontractor may recover from the subcontractor
for liability so incurred
● There is no coverage for sole proprietors or
partners when there is an election for noncoverage
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Types of Injuries Covered
● Traumatic or Single Occurrence Claims
o Any injury arising out of the scope and course of employment is covered
o The standard of proof is preponderance of the evidence
● An injury is only accidental if it is caused by a specific incident and is
identifiable by time and place of occurrence with the following
exceptions
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Repetitive Motion
Carpal Tunnel Syndrome
Gradually Occurring Back Injuries
Hearing Loss
Other Exceptions include Separate Statutes for Certain Types of
Compensable Injuries to include: Mental Injury/Illness, Cardiovascular,
Coronary, Pulmonary, Respiratory, or Cerebrovascular
Injury/Illness/Death
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Occupational Disease
● Defined as any disease that results in disability
or death and arises out of an in the course of
employment, or naturally follows or unavoidably
results from a compensable injury
● To be compensable, the disease must be due to
the nature of employment in which the hazards
of the disease exist, are characteristic thereof,
peculiar to the employment, and actually
incurred in the employment
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Excluded Injuries or Claims
● Stress-induced mental injuries with no accompanying
physical injury (unless accompanied by a crime of
violence)
● Certain Assaults
● Horseplay (except “innocent victims”)
● Certain Recreational and Social Injuries
● Injuries that occur at a time when “actual employment
services are not being performed”
● Injuries Substantially Occasioned by the use of Illegal
Alcohol, Illegal Drugs, or Prescription Drugs Used in
Contravention of a Physician’s Orders
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Statute of Limitations
● Compensation for disability for an injury, other than occupational
disease or infection, is barred unless a claim is filed with the
AWCC within two years from the date of injury
● A claim for an occupational disease or infection is barred unless
filed within two years from the date of the last injurious exposure
● A claim for silicosis or asbestosis must be filed within one year
after disablement and the disablement must occur within three
years from the last injurious exposure
● A claim for compensation on account of death is barred unless
filed within two years of the death
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Choice of Physician
● Employer Has the Right to Choose Initial Treating Physician
● Claimant Has an Absolute Right to Obtain a Change in Treating
Physician
o The Commission has found that the “one time” change of treating
physicians has not occurred until the Commission enters an order
changing the physician
• Where the claimant simply requests a new physician and the employer
agrees, the Commission does not recognize that as the one-time change
● Medical Treatment Must be Reasonable, Necessary, and
Authorized
● There is a Medical Fee Guide/Schedule Provision for Cost
Containment
● Managed Care is Voluntary
● Medical Records are Obtained Pursuant to a Signed Release
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Claim Contesting and Adjudication
● Each Employer Desiring to Controvert the Right to
Compensation Must File, On or Before the 15th Day Following
Notice of the Alleged Injury or Death, a Statement on Form AR-2
Asserting that the Right to Compensation is Controverted
● Method of Claim Adjudication
o Administrative Law Judge presides over a hearing
o A party can appeal the judge’s decision to the AWCC
o An appeal from the Commission’s opinion is heard by the Arkansas
Court of Appeals
● The Commission is Not Permitted to Approve Settlements with
Open Medicals
● A Workers’ Compensation Claim Cannot be Settled in Arkansas
Without Approval by an Administrative Law Judge
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Available Defenses Based on Employee
Conduct
● Self-Inflicted Injury
● Willful Misconduct or Horseplay
● Injuries Involving Drugs or Alcohol
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Alcohol and Drug Defense
● Intoxication Must be Carefully Documented
o Blood or alcohol test
o Evidence must be properly presented in court
• Chain of custody of tested material must be accounted for
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Affidavit of person taking sample
Nurse or person storing sample for pickup
Courier
Laboratory person receiving sample
Laboratory technician testing the sample
• Testimony of a Toxicologist is important
o With serious injuries, hospitals often do not like to test
• Employer should send a representative to the hospital
● A Positive Test Shifts the Burden of Proof to the Employee that
the Alcohol or Drugs Did Not Substantially Cause the Injury
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Case Study #1
● Transport, Inc. versus Hill, 2009
o Respondent denied case based on intoxication defense
• Claimant did not fail drug screen, simply refused to undergo hair follicle test
four days after accident
o An Administrative Law Judge held that the claimant’s refusal to take
test was not sufficient to raise the presumption of intoxication
o Judge found that claimant otherwise established a compensable injury
and awarded benefits
o The Commission affirmed the Administrative Law Judge’s decision
o Court of Appeals also affirmed
• Court noted that the plain language of the statute did not specify the refusal
of a drug test was sufficient to create the presumption
• Court stated only the presence of alcohol or drugs in creating presumption
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Case Study #2
● Hanks versus ACF Industries, Inc., 2003
o Claimant was injured “while simply standing in an unfortunate location
when a structurally deficient rack failed, striking and injuring the
claimant”
o Drug test revealed the presence of marijuana in the system metabolites
and respondents denied the claim
o An expert testified that:
• Marijuana metabolites can remain for days or even weeks
• “Failing to get out of the way in time to avoid injury when the rack came
apart is consistent with impairment caused by marijuana”
• “The urine sample results are also consistent with the claimant not being
impaired when the rack broke”
• The presence of marijuana metabolites is not necessarily indicative of
intoxication or impairment
o The Commission found, “the events unfolded so rapidly when the rack
broke that the claimant’s injuries appear inevitable, regardless of
whether or not his normal reaction time might have been impaired”
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Fraud
● Class D Felony for the following:
o False statement or representation of the purpose of obtaining
benefits or payment, or for the purpose of defeating or wrongfully
increasing or decreasing any claim or payment or obtaining or
avoiding workers’ compensation coverage
o Willful discrimination with regard to hiring or terms or tenure, or any
term or condition of work on account of pursuing a compensation
claim
o Obstructing or impeding the filing of a claim for benefits
● Act 796 provided for the establishment within the Arkansas
Insurance Department of a workers’ compensation fraud
investigation unit
o The unit can investigate and refer for prosecution
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Exclusive Remedy
● Workers’ Compensation Remedies are Exclusive
● Exceptions
o Prime contractors who are not statutory employers
o Employers who are not insured (employee can elect to
claim workers’ compensation benefits or sue in tort)
o Acts of employer which result in injury to the employee that
are deemed willful and intentional
● No Additional Penalties for Unsafe Working Conditions,
however Act 796 mandated the establishment of the
AWCC Workers’ Safety and Health Division
o Designations of extra-hazardous employers
• Remedial plans
• Inspections
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Third Party Actions
● Third Parties Can be Sued by an Injured Employee
● Co-Employees Can be Sued for Work-Related Injuries
● Subrogation is Available
o It is often difficult for employers to recover losses
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Independent Contractors and Professional Employment
Organizations / Temporary Staffing Services
● Independent Contractors are not Employees and therefore Not
Covered under the Arkansas Workers’ Compensation Law
o Not entitled to benefits
● A Licensed Professional Employer Organization Shall be
Deemed an Employer of the Covered Employee
o Exclusive remedy applies
● Temporary Employees are Covered Under the Temporary
Staffing Service’s Insurance Plan
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Questions
Special Thanks to
WRIGHT, LINDSEY, & JENNINGS LLP
Little Rock, AR
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