How does Worker’s Comp Work?
How Does Worker’s Comp. Work ?The Employee’s Perspective
I’ve been representing injured workers at the Department of Industrial Accidents since 1982. I’ve come to appreciate this as the most satisfying work I do, because I can help people get benefits to pay their rent or mortgage and get the medical treatments they need. The worker’s compensation system was set up with good intentions, but it can be steered by the insurers, whose main interest is in limiting the payments you can get. Insurers and their lawyers work with this system every day, but you may only go through this only once. If you’ve been injured at work, you may wonder how this system works from your perspective.
The Massachusetts Worker’s Compensation system has been around since 1911, and it’s always been based the simple idea that if you were injured at work, you don’t have to prove your employer was at fault to get benefits. You only need to prove that your injury happened at work, or was caused by your work. The system encourages insurers to start paying benefits if an injury keeps you out of work for more than 5 days, and you should only have to file a claim for benefits when an insurer fails or refuses to pay you the benefits you’re entitled to.
If you have never been introduced to this system before, it may seem like a maze to you, with its own vocabulary, like: Exposure, 14-day and 180-day time deadlines, Payment Without Prejudice, Conciliation, Conference, and Hearing. And why is an “Independent Medical Exam” not the same thing as an “Impartial Physical Examination”? To make matters more confusing, almost everything at the DIA is done on special forms, many of which are explained below.
First, you should know that there are usually 4 sides to the way the system works:
INSURER: The law requires employers in Massachusetts to have worker’s compensation insurance, and Insurers collect their premiums to pay worker’s compensation benefits for the employer, if necessary. (If no injuries happened at your job in the last policy year, the insurer basically got to keep the money from your employer). The insurer is liable for the exposure for payments that may result when you are injured at work. “Exposure” is all the weekly disability payments an insurer may make to you, plus payments for your medical expenses, plus all other benefits provided by law. The insurer and its lawyers always try to limit this exposure. But starting out from the date of injury, the system is basically self-policing: the DIA does not monitor your case to see if the insurer is paying you the right benefits after a report of injury is filed. The DIA can only take action on a case when someone files a claim to bring the case to its attention.
EMPLOYEE: When you’re injured at work, you become an “exposure” risk to the Insurer. If you haven’t been getting payments, or payments are in the wrong amount, or if you’re not getting the right medical treatments, the DIA won’t know about it unless you bring it to their attention. But when an employee files a claim, the DIA will require that the claim is filed properly under its rules and regulations, or the claim may be rejected on a technicality. In order to file a claim with the DIA, you have to know what benefits you might be able to get. One injury at work could lead to the payment of total disability compensation, partial disability compensation, medical benefits, permanent and total disability compensation, a scarring /loss of function payment,and a job retraining program. But how can you file a claim for these benefits unless you know when you might be entitled to them ? Or if an insurer stops your payments, how do you know if they’re wrong ?
DEPT. OF INDUSTRIAL ACCIDENTS: The DIA is a special administrative board that handles claims on the worker’s compensation benefits you might be entitled to. The DIA has regional offices in Boston, Lawrence, Fall River, Worcester, and Springfield, so that the regional office that handles your case is based on where the employee lives, not the insurer or employer’s convenience. The DIA has its own special terminology: a “Conciliation” is not a “Conference”, but your case would have to go through both of these before you appear at a “Hearing” (see these topics below). The DIA is also a complicated institution, with its own practices and rules and regulations. And the DIA requires all the parties who appear before it to know and follow the same rules, whether that’s an experienced insurance company lawyer, or you if you decide to represent yourself.
EMPLOYEE’S ATTORNEYS: Because this is a system that serves people who are out of work after an injury, the Worker’s Compensation system provides that your attorney can’t charge you for work by the hour. There are no “retainers” or up-front fees paid by the Employee for legal representation. Instead, your attorney can only earn a legal fee by recovering it from the Insurer, if and when your attorney is successful on your claim, or if your attorney is successful in getting you a settlement from the insurer. An attorney should also investigate your case to get you all the benefits you may be entitled to, including benefits outside the worker’s compensation system. Most importantly, employee attorneys bring their experience with the ins and outs of the Department of Industrial Accidents and their prior experiences with the insurer to bear on behalf of their clients.
Employees get introduced to the worker’s compensation system if they miss at least 5 work days after an injury. Your Employer is supposed to send a First Report of Injury report form to the Insurer (on DIA Form 101) and the Department of Industrial Accidents is supposed to get a copy of the form. This starts the process, and your injury becomes a “claim” to the Insurer. On the DIA’s books, a Board Number is assigned to you for this one injury:
EMPLOYEE: TERRY SMITH
EMPLOYER: ABC EQUIPMENT CO. INC.
INSURER: OLD LINE INSURANCE CO.
INJURY DATE: 12/24/2009
BOARD # 35001-09
The names above are fictional, but the “Board Number” isn’t. The number means this injury was reported after 35,000 other injuries in 2009. If you’ve been injured at work, you have plenty of company. Worker’s compensation claims usually go through these 5 steps before ever being heard by the Department of Industrial Accidents, although not everyone’s case goes through all 5 steps before going to the DIA.
STEP 1: THE EMPLOYER’S REPORT OF INJURY GOES TO THE INSURER:
If you’re out of work for more than 5 days your employer is legally required to file a report of your injury with its insurer and the DIA. If and when an Insurer gets that report, the law gives them 14 days to either pay benefits, or deny payment. In either event, the Insurer is required to send a copy of its decision on a “Notice of Payment” (DIA Form 103) or “Notice of Denial” (DIA Form 104) to the Department of Industrial Accidents, and to you.
– BUT WHAT IF MY EMPLOYER SAYS IT HAS NO COMPENSATION INSURANCE ?
In the unlikely event that your employer truly does not have coverage, you still have the right to file a claim for worker’s compensation benefits with the DIA’s “Trust Fund”, which pays the same benefits that would be made by an Insurer. But first, it’s necessary to check with the DIA’s insurance registry staff to make sure your employer didn’t have insurance on the day you were injured. Some important details:
- Almost all Massachusetts employers are legally required to have worker’s compensation insurance for their employees, and failing to have compensation insurance coverage is a criminal violation in Massachusetts. Most employers satisfy the worker’s compensation requirement by paying for an insurance policy with a private insurance company. Over the years, I’ve had dozens of my clients tell me their employer claimed there was no worker’s compensation coverage, but the actual failure to have coverage is fortunately rare. Much more often than not, an employer will say there’s no compensation insurance when they really mean: “I don’t want to fill out a First Report of Injury form” (see below).
- Much more often, we run into “SELF-INSURANCE” coverage: If an employer is willing to meet certain requirements, it can become Self-Insured and administer its own worker’s compensation payments. Some hospitals and large companies are self-insurers in the Massachusetts Worker’s Compensation system, although their actual claims handling is usually done by a Third-Party Administrator (TPA) company. Warning: when your employer is a “Self-Insurer” they may feel they have an extra financial incentive to see that you don’t collect worker’s compensation benefits.
STEP 2: THE INSURER HAS 14 DAYS TO DENY OR PAY.
Whether the Insurer starts paying you or it denies payment, remember that the DIA Forms are blanks filled in by the insurer. It says “Department of Industrial Accidents” at the top of both the Notice of Payment (Form 103) and Notice of Denial (Form 104) but the DIA did not make this decision. The Insurer fills out the form and only sends a copy to the DIA. The DIA will take no action on its own either way at this stage of the process.
- What if the insurer denies the claim ? The well-intentioned requirement that an insurer must respond to a First Report of Injury within 14 days has a downside. Too often, I’ve seen insurers deny a claim within 14 days, because they haven’t received copies of proof of an injury, or just because the Employer has been sloppy about reporting the claim. This is usually referred to as “insufficient medical” on the Insurer’s Denial form. Once an insurer has sent out a denial, it’s under no obligation to revisit the question. The injured Employee’s only sensible option at this point is to take steps to file a claim with the DIA. Warning: I’ve had many clients tell me they wasted a lot of time calling the adjuster who denied their claim, only to have the adjuster string them along for weeks or months, promising to “re-examine” the case without ever doing anything about it.
- What if my employer never notifies the insurer? This is a potential hole in the system. Without a “First Report” (DIA Form 101) the Insurer will not know about your injury. What’s the solution? You may need to find out who the insurer is and notify them yourself. Worker’s compensation insurance information is supposed to be posted out in the open at your workplace, and the DIA has an insurance registry section that keeps track of the registered insurers and who they cover. The DIA’s phone number is 617-727-4900.
STEP 3: INSURERS GET TO “PAY WITHOUT PREJUDICE” FOR UP TO 180 DAYS:
When you have been injured at work and you’re going to be out of work for awhile, the worker’s compensation system gives the Insurer an incentive to make the first payments to you. But all payments made during the first 180 days are “without prejudice”, which means that the insurer admits nothing by making these payments. It’s payment “without prejudice” to the insurer.
- Your weekly checks should usually be 60% of your gross earnings based on your
“Average Weekly Wage” (click here for details *), and the insurer is supposed to pay for your medical treatments so you can return to work as soon as possible.
- But to the Insurer, your payments also represent “exposure” and it’s the claims adjuster’s job to try to limit that exposure over time.
- During this 180-day period, the insurer has the right to stop or reduce your payments without asking your permission, or the DIA’s permission, because an Insurer’s payments during this period are not a legal admission of any liability. To stop or reduce your payments, the law only requires the Insurer to send you and the DIA a notice one week in advance. Like the Notice of Denial (see above) the “Notice of Termination” (DIA Form 107) is a blank form – it’s filled out by the Insurer, not the DIA.
- If an Insurer reduces or stops your payments during this 180 day period, the DIA has not stopped your payments, and nobody at the DIA has reviewed your case to see if your payments should have been stopped. The law gives you the right to file a claim with the DIA to ask a Judge to order the insurer to reinstate your benefits.
Your “Average Weekly Wage” equals what you made in the last 365 days, divided by 52 weeks, unless you worked less than 50 weeks. But there are exceptions to this rule, and insurers sometimes pay on an “estimated” AWW without ever getting the right number from your employer. You have the legal right to correct the AWW figure if it’s wrong.
STEP 4: WHAT ABOUT INJURIES THAT DON’T GO AWAY AFTER 180 DAYS ?
I’ve always believed that the original reason for the 180-day “payment without prejudice” law was that if an Insurer learns that a work-related injury is going to keep you out of work for more than 180 days, they should continue to make payments on your claim, which means that the Insurer should legally “accept” your case. Unfortunately, many insurers don’t see it my way:
- Some insurers make it a policy of asking injured employees to sign a form extending the 180 day period. Warning: the legal effect of signing this form is to continue the period where the insurer has no legal liability for your claim; it is NOT a promise to keep paying you for another 180 days.
- If you have been out of work for more than 180 days because of your injury and the
Insurer has continued to pay you, they have accepted your claim and they lose the right to stop your benefits on their own. But they still have the right to file a claim with the DIA to ask a judge to reduce or stop your benefits. The Insurer would need a written statement from a doctor to support such a claim before they can file it with the DIA. If your own doctor does not think you can go back to work, there are other ways for the Insurer to get what it wants.
STEP 5: “IME” DOCTORS:
A medical examination paid for by an Insurer is called an “Independent Medical Examination”, although some of the doctors who perform this service are more “independent” than others. If a doctor has retired from regular practice and makes all of their income by doing “IMEs” for insurance companies, is that doctor’s opinion “independent” ? I would say that in many cases the answer is NO.
- By law, an insurer has the right to have you examined by a doctor of their choice by
sending you a letter telling you to report for an exam. The law also provides that an
insurer can suspend your compensation benefits if you refuse to go to their “IME” exam.
- Doctors who perform “IME” exams are not treating you for your injury. They are only doing an examination for the Insurer.
- In accepted cases, the Insurer can file a claim with the DIA to stop or reduce your
benefits, as long as it supported by any doctor’s report, even though the report of an
“IME” doctor may contradict your own treating doctor.
CLAIMS AT THE DEPARTMENT OF INDUSTRIAL ACCIDENTS:
The longer an injury keeps you out of work, the more likely it is that either you or the insurance company will end up filing a claim with the DIA. The Insurer’s claims people and lawyers are supposed to look at your claim and try to figure out how to save money for the company in the long run. Remember: you are “exposure” to them. Insurers pay their adjusters and lawyers to be skeptical about how your injury affects you and your ability to work. It’s their job to say: “We don’t believe you – prove it”.
The Department of Industrial Accidents is where an Employee can seek benefits from the Insurer, and Insurers can ask to have those benefits denied or limited. But in all proceedings before the DIA, the law requires the Employees have to prove their case.
Once an Insurer or Employee has filed a claim, the DIA handles all claims before it in the same order. The following is not intended as a legal definition of the procedures at the DIA. Instead, these are basic explanations of what each of these proceedings can mean to you:
- CONCILIATION: All claims filed with the DIA start with a “Conciliation”, which is a meeting at the DIA where lawyers for the Insurer and the Employee are required to explain to the Conciliator what the case is about. The Conciliator is supposed to see if the parties can come to an agreement, but a Conciliator can’t award benefits or take them away. The party filing the claim must show the Conciliator enough written evidence to support their claim, so that the Conciliator can “send the case forward” to be heard by a Judge. For example, where an Employee files a claim for weekly disability benefits, just being injured is not enough; the Employee must also have written medical proof that the injury is work-related , and that the injury why you can’t work. Without written medical proof, the Conciliator is not supposed to send your case forward, so it’s essential to get the required proof before the Conciliation date .
- CONFERENCE: This is the first time a case is actually seen by a Judge at the DIA. With rare exceptions, only Judges have the legal power to award benefits, stop benefits, or change them. This is also the point in the process where insurance lawyers thrive on picking your medical records apart for inconsistencies or missing proof. For example, in cases at a Conference where the Employee is seeking weekly disability and medical benefits, the DIA requires us to produce written medical proof to support your claim, to prove that:
1) You were injured at work, and;
2) Your injury has disabled you from work, and;
3) That it’s necessary for you to have certain medical treatments.
I often face the situation where a doctor writes out a disability note that says only that an employee should stay out of work, but not why. We usually have to contact a doctor’s office long before the Conference to explain that under the DIA rules, being injured just isn’t enough. Test results and hospital records alone are usually not enough to prove that you were injured at work and that you are still out of work because of the injury. In most cases, only a doctor’s written opinion on items “1″, “2″ and “3″ will be enough to support an Employee’s case at the Conference.
**Some exceptions to this rule are where: 1) An Insurer can stop or lower your benefits because you have returned to work on your own, or; 2) Insurers can suspend benefits for technicalities like failing to attend a medical examination, or failing to fill out a report of earnings collected from a “light duty” or temporary job. Other exceptions may apply, as well. **
- IMPARTIAL PHYSICIAN EXAMINATION: When a case is appealed from the Judge’s Conference decision, the Employee is next examined by an “Impartial Physician” who files a report in your case to be used by the Judge. The doctors who perform these exams have volunteered to do them for the DIA. The doctors are impartial because they’re not working for either side in the case, but they’re not perfect. They don’t always understand the medico-legal issues they’re supposed to report on. Sometimes, the doctor’s report doesn’t address the most important issues in your case that the Judge needs to have answered in a case. (In these cases, the law allows us to take the Impartial Physician’s deposition to find out more details, and/or submit further medical proof).
- HEARING: At a Hearing, you have the right to testify and to present proof of how your injury happened and how it affects you. But the most important issue at a Hearing is often the law that provides the Impartial Physician’s report is presumed to be the only medical evidence in your case. If this doctor’s report is unfavorable to your case, it’s important to know how to challenge the doctor’s opinions and try to convince the Judge to allow more medical evidence to be considered.
- THE REVIEWING BOARD: The Department of Industrial Accidents has its own appeals board to review appeals of a judge’s final Hearing decision in your case. But an Appeal is not another Hearing. Instead, it’s a request to the judges on the panel to review the judge’s decision to correct errors of law at the Hearing.
- “LUMP SUM” SETTLEMENTS: It’s only natural for people to say they want their day in court, but contested cases can be risky for both sides. Why? Important witnesses can leave the area or die before they can testify at a Hearing. Medical tests can turn up unexpected results, and doctors can come up with unexpected opinions. Also, no lawyer can guarantee exactly how a Judge will decide a case. Sometimes, it’s possible for the Insurer and Employee to come to an agreement that they’d rather settle the case by a onetime payment to the Employee in exchange for the settlement of the Employee’s claims to collect weekly disability benefits. (In some cases, other benefits can also be included in a lump sum settlement).
When looking at a possible settlement, the most important question the Employee faces is whether or not this will be good for you in the long run, and that’s not simply a question of how much money the insurer is willing to pay. My philosophy is that a good settlement is one that you get to keep; and a settlement is only good if it’s in your best interests. A few examples:
1) If you settle your case and you can’t physically perform your old job, a settlement
would be a good idea only if you already know what you’re going to do the day after you settle. I once settled a case for a truck driver who had a permanent arm injury that prevented him from driving a truck. But he had been retrained to start making more money the next day as a heavy equipment operator. This was a “good” settlement because my client could afford to put his settlement money in the bank.
2) If your ability to work is limited to the point where you’re awarded Social Security Disability benefits, it’s important to provide in the settlement that the Social Security Administration won’t unfairly penalize you for the amount of your worker’s compensation settlement by what they subtract from your future Social Security payments. Again: it’s what you keep from a worker’s compensation settlement that defines a “good” settlement.
3) Many times, I’ve been contacted by an employee who has been offered what looks like big money by an insurance adjuster to settle their case right away. (“Why get a lawyer involved ?” the adjuster suggests). Then I’ll spell out how much the employee might be paid by the insurer in weekly benefits, multiplied by the number of years they might collect payments, and the insurer’s settlement offer starts to look small by comparison.