Every employer is required by law to carry workers’ compensation insurance. If you are looking for coverage or need more information with a workers’ compensation claim, ask your insurance broker the following questions so you know what to expect. Your insurance broker should be your partner looking out for your best interests and giving you all the information you need. If they don’t have the information they should be ready to research and follow up with you.
There are so many insurance brokerages that offer similar services, so how do you choose one that you can trust, who has dedication and in invested in you and your business? You can look online and read reviews from their clients. You can also get personal referrals from family and friends. Make sure you have these questions handy when you do find an insurance broker you’d like to work with.
Whether this is your first question or your last, it should be on your list. The answer you get from your broker (to be) will tell you about their depth of knowledge and commitment to your needs over their needs of expediency.
Quite often the answer you’ll from your broker today, may be strikingly dissimilar to the answer you would get from them a year from now. Why? Workers’ compensation is an ever evolving industry that is affected by so many factors from changes in the Occupational Health and Safety Administration (OSHA) rules to even local and state elections.
How Do You Handle Your Workers’ Compensation claims?
Each broker handles a work compensation claim differently from total hands off to complete guiding though the process. This subject is one of the biggest pain points for companies. The system is geared completely against the employer if for the only reason that it’s not their area of expertise. Not to mention that there is rampant fraud in the form of exaggeration of injury. Before you have a claim ask your broker what the process they would take given different and likely scenarios for your industry.
Are your employees classified correctly using the 400-500 employee classifications given to us from the Workers' Compensation Rating Bureau? A large percentage of employees are misclassified into a higher rated classification resulting in higher work compensation cost. A good broker will tell you this and being armed with this question before you enter the conversation will help you better understand your broker’s sense of ethics.
This is similar but not the same as the above question, but it has more to do with your ongoing relationship with your broker. During renewal, your broker may not be aware that the size of your staff and your payroll has changed. Did you have a growth spurt or do some layoffs? Since premium cost is tied to a percentage of your payroll, it is important that this number is accurate.
A good broker can answer this because dealing with OSHA is not a fun experience. Most clients we begin working with have some program in place but the program may be out of compliance for a variety of reasons, like regulations have changed. Many issues come from a lack of proper documentation or systems put in place that complete the necessary responsibility.
The better brokers do their best to hold down rates, and despite significant investment in medical management efforts, workers’ compensation costs are consistently higher than group health costs for the same diagnosis. Why is this? Numerous studies have shown that a small percentage of medical providers are driving a large percentage of the workers’ compensation costs. By shopping around for the best fit for your business, a good broker can keep a lid on rising rates.
Insurance brokers constantly deal with customers’ personal identifiable information (PII), which links a person with his or her identifying or transactional information. Yet many in the industry may not be aware of the legal requirements for handling or storing this information. The transfer of knowledge is absolutely necessary if brokers are to counsel their clients. However, given the sensitive nature of the information, federal and state data privacy protection laws apply.
Data protection laws have tended to focus on PII. That is precisely the type of information that business entrust to their broker professionals. Ask about your broker’s protocols for protecting your data, including any breach incidents and recovery methods.
It depends. Experience modification factor or your claims history sets a benchmark of how you are performing against other companies in your state and industry. The process of creating experience credits and debits varies by state, so you’ll need to ask your broker for details of your personal situation. You’ll need to also ask about additional premium discounts in your state to get the best rate
Some estimate report that as much as 25 percent of all U.S. insurance fraud claims are related to workers’ compensation. Although small businesses are least likely to be able to cope with the ensuing expenses, they are the ones that are hit the hardest each year by workers’ compensation claims.
There are some ways to detect workers’ compensation fraud. For example, is the claim filed on a Monday morning, when the employee may have come in with an injury incurred over the weekend? Has that employee filed a previous claim at your business or a different business?
A good broker can refer you to the right authorities if you suspect fraud.
When it comes to workers’ compensation insurance, there are plenty of options to choose from. Your broker should have expert knowledge of all of them. From traditional plans to CDHPs to various self-funding options and everything in between, your broker should be able to tell you the pros and cons of all of these plan options for your company. You’ll also want to find out what methods the broker uses when recommending benefits options.
So far only Texas allows employers to opt out of workers’ compensation and other states are considering this by way of bills in their respective legislatures. But opting out of workers’ compensation does not opt to employers’ out of the responsibility for employees’ injury while on the job. There are other types of coverage, like private benefits plans, but these plans lack controls and oversight and may be challenged in the courts. Your options are limited, but like all workers’ compensation information, it’s ever-changing. Your broker should know what these options are.
Shopping for the right broker may take some time, but the questions above can help you vet a good broker from just an average one.
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