Remember: first aid claims count. That’s the gist of a recent regulatory clarification issued in California explaining reporting requirements for workers’ compensation insurers to include small medical only and first aid claims, even if they are paid by an employer. This requirement is not new, nor is it a California-only requirement. While California took the step to issue such a reminder, this claims reporting requirement is actually applicable in all states, and California’s reminder gives us all a reason to reacquaint ourselves with the rule and why it’s important. California’s clarification, issued by the Workers' Compensation Insurance Rating Bureau of California and backed by the California insurance commissioner, emphasizes that all workers’ compensation claims with paid medical treatment must be reported. This development has two distinct implications for employers:
-
Employers should report all paid medical claims, including minor injuries that require first aid to their claims administrators.
-
Reporting small medical only and first aid claims when they hadn’t previously been reported may, in certain cases, increase an employer's experience modification factor. That may have an impact on workers’ compensation premium, as well as contractual agreements that require the disclosure of loss experience.
The California Labor Code defines first aid as "any one-time treatment, and any follow-up visit for the purpose of observation of minor scratches, cuts, burns, splinters and so forth, which do not ordinarily require medical care. Such one-time treatment and follow-up visit for the purpose of observation is considered first aid even though provided by a physician or registered professional personnel." For the purposes of reporting, small medical only claims include those involving only the provision of first aid.Why is the WCIRB issuing this clarification? Relatively few small medical-only claims are likely to be paid by a commercial insurer, as they are often well within a company’s deductible and, thus, not reported by the company to their insurer or claims administrator. Nevertheless, workers comp insurers in California, and the other 49 states, are required to report all claims for which medical treatment costs are incurred - whether those costs are paid by an insurer or an employer. Many of these claims are not reported, however, and this definitely has consequences, which are worthy of consideration.For one, the WCIRB has expressed concerned that some employers derive an advantage in their experience modifications by not reporting such claims, and they are working on ways to address this concern. Additionally, it is not uncommon for a first aid claim to develop into a larger reportable claim. Early notification – when an injury requires only first aid – may help the insurer or third party administrator more effectively manage the potential workers’ compensation claim, potentially leading to a better outcome.
Collecting more comprehensive data over time helps all involved stakeholders – insurers, brokers and employers – develop better risk management strategies.
Non-reporting also results in the loss of valuable data and insight for regulatory agencies, insurers and employers. All claims provide data that can be used to drive effective decision-making and to improve problem areas, among other things. For instance, a host of small claims can help pinpoint workplace safety issues, allowing insurers to help their clients manage risks more aggressively, potentially preventing future injuries or a much larger claim down the road. Collecting more comprehensive data over time helps all involved stakeholders – insurers, brokers and employers – develop better risk management strategies. Non-reporting results in an incomplete picture and analysis that is not fully informed, which can adversely impact decisions made based on that data.Still, there is a lot of understandable hesitation from employers about reporting such claims and how this information can be used. A recent WCIRB-sponsored webinar drew nearly 450 attendees to hear the agency’s Executive Vice President and Chief Actuary Dave Bellusci and Sharon Fagganio-Callaway, WCIRB Managing Director, Customer Experience, address some of these concerns and how the agency is looking to address them. During the webinar, Mr. Bellusci explained that the Unit Statistical Reporting Plan has always required insurers to report the cost of all claims and made no first aid exception. In fact, he noted that the Experience Rating Plan has always required the cost of all claims to be used in experience rating. While there are no exceptions for claims with paid medical treatment, there are some gray areas, including scenarios where the employer uses contract medical professionals paid annually rather than on a fee-for-service basis. According to WCIRB, however, if the cost can be allocated to a single claim, the cost should be reported. Mr. Bellusci also said that a WCIRB committee was reviewing whether or not to exclude very small claims in future calculations of experience modification factors. WCIRB, for instance, is considering exempting the first $250 of all claims. An attendee asked how the National Council of Compensation Insurance (NCCI), the reporting organization for more than 30 other states, handles the first aid claim issue. According to WCIRB’s representative, NCCI discounts medical only claims on a percentage basis to deal with this issue, but the WCIRB feels that the percentage approach is too complicated and is studying a dollar threshold instead. California’s reminder has sparked renewed interest and more learning about this longstanding rule that it shares with other states. Workers’ compensation claims can be challenging, regardless of the state system. Employers with questions about their workers’ compensation claim reporting – not just in California but across the nation – should contact their insurer to assure their worker compensation claims are properly reported and reach a timely and optimal resolution. About the AuthorGary Hinson is vice president and workers compensation claim lead at XL Catlin. His career includes extensive experience leading workers compensation claims operations for various global insurers.
- Share This Article:
-
-
Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.
US- and Canada-Issued Insurance Policies
In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.