According to multiple sources, the Workers' Compensation Insurance Rating Bureau (WCIRB) recommended a 4.1 percent mid-year increase in the workers' compensation rates that insurance companies charge employers across the state.
In a letter to Insurance Commissioner Dave Jones, WCIRB indicated that this increase in workers' compensation base rates would raise premium costs from $2.41 for every $100 of payroll to $2.51 for every $100 of payroll.
The proposed 4.1 percent increase would affect all new and renewed policies starting in July.
]]> According to WCIRB, there are multiple reasons as to why the increase is necessary, including:Under the current system, WCIRB advises the Insurance Commissioner on workers' compensation pure premium rates several times a year, recommending either increases or decreases. The Insurance Commissioner is then free to either accept or reject these recommendations when advising California's licensed workers' comp companies on rate adjustments.
In addition, California's 400 licensed workers' comp companies may also accept or reject WCIRB's recommendations and establish their own rates. (They typically use the Insurance Commissioner's recommendations as their primary benchmark.)
When making its recommendations regarding pure premium rates, WCIRB previously relied upon approved pure premium rates. However, thanks to a recent directive by Commissioner Jones, WCIRB must now consider the average insurer-filed pure premium rate (i.e., the current market rate) when making its calculations/recommendations.
(Pure premium rates are figures that reflect the actual or anticipated costs to insurers stemming from indemnity payments and other allocated losses; overhead costs and profits are not included in the calculation)
Stay tuned for further developments in the area of workers' compensation defense law ...
Sources:
Risk & Insurance, "California rating bureau seeks midyear premium increase," April 30, 2102
North Bay Business Journal, "4.1 percent workers comp increase proposed," Dan Verel, April 23, 2012
]]>How then do state officials here in California and across the U.S. crack down on work comp fraud? Specifically, what tools are at their disposal?
A recent story on the Special Investigations Department of the Ohio Bureau of Workers' Compensation provides some fascinating answers.
]]> Like something out of a spy novel, workers with the Special Investigations Department of the Ohio BWC use a variety of tools to catch work comp fraud in the act, including undercover vans, hidden microphones, long-range cameras and pinhole cameras.These efforts have paid off as the team has documented hundreds of cases of work comp fraud leading to convictions and, even more importantly, savings for the state. Last year alone, the Special Investigation Unit saved the Ohio BWC $73 million.
"It's very disheartening to see people abuse the system because there are people who are genuinely hurt and who genuinely deserve this benefit," said one of the team's special agents.
In addition to conducting surveillance in the field, the Special Investigations Unit also works to stop potential work comp fraud before it even happens, examining BWC data for potential patterns.
"You have to know the system to know how to beat the system," said the head of the BWC's intelligence unit. "We sit around in staffing meetings, trying to figure out if we're going to try to get money out of workers comp -- how would we go about doing it - and then we turn around and build data queries to go try to mine that data to see who else might have thought of that idea."
Workers compensation fraud/employee fraud is a very serious crime. If you suspect that such a crime has been perpetrated against your organization, you should strongly consider speaking with an experienced workers' comp defense attorney.
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
WBNS-TV, "Group catches workers' comp cheaters in the act," Kurt Ludlow, May 10, 2012
]]>Specifically, the study -- conducted by researchers from the RAND Corp. -- found the following: 1) states reporting higher fatality rates in the construction sector typically reported lower non-fatal injury rates and 2) states reporting lower fatality rates in the construction sector typically reported higher non-fatal injury rates.
Even more intriguing, the study determined that these trends seemed to be isolated to certain areas of the country, with southern states (Alabama, Arkansas, Georgia, Kentucky, Louisiana and Texas) reporting more work fatalities and fewer work injuries, and western states (Arizona, California, Oregon, Washington) reporting fewer work fatalities and more work injuries.
]]> Here, researchers examined data from the federal Bureau of Labor Statistics (BLS) on construction injuries and fatalities from 2003 to 2005 and 2006 to 2008. The construction industry was selected for the simple reason that it has the highest number of fatalities among all work sectors.Why then did states like California have such a lower rate of work fatalities and higher rate of non-fatal work injuries in the construction sector?
The authors theorize that these western states tend to have more generous work comp systems, which creates much more of an incentive for workers to report their injuries. In addition, they suggested that because these generous benefits can result in higher work comp premiums, employers have a greater incentive to implement safety programs to cut potential costs. This in turn leads to a lower fatality rate.
"We were surprised by the relationship between fatal and nonfatal injuries," said John Mendeloff, one of the primary authors of the study. "One key factor influencing injury trends seems to be the scope of benefits offered by a state's workers' compensation program, but that explains only part of what we found."
Indeed, the researchers also identified the presence of both state-run OSHA programs dedicated to carrying out workplace inspections and strong labor unions as possible reasons for this trend.
Stay tuned for further developments in the area of workers' compensation defense law ...
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
EHS Today, "States with low nonfatal injury rates in the construction industry have high fatality rates," Sandy Smith, May 9, 2012
]]>However, a recent case out of Santa Clara County accuses neither an employee nor an employer of work comp fraud, but rather a billing company.
Last month, prosecutors filed a variety of criminal charges against Trudy M., the president of a billing company for spinal surgeries called Implantium, and Tigran S., the company's medical director.
Here, Implantium purchases implant devices directly from medical manufacturers and supplies them to hospitals without ever handling them. The hospitals then implant these devices into the backs of injured workers and Implantium recovers its costs/turns a profit by billing the injured workers' work comp carrier.
Prosecutors allege that under California law, billing companies are only allowed to profit by up to $250 per device, but that since 2008, Implantium purposely altered its invoices -- sometimes by as much as tens of thousands of dollars -- to secure excessive compensation from work comp carriers.
]]> Specifically, prosecutors are alleging that the invoices submitted by Implantium defrauded Santa Clara County and the city of San Jose -- both self-insured for workers' compensation -- out of a significant amount of money and that such schemes can drive the cost of work comp premiums up for all employers across the state of California."These scams are probably one of the largest cost drivers involving workers' compensation fraud," said Donald Marshall, chairman of the state Fraud Assessment Commission. "Any time a provider or a person bills the workers' compensation system in excess of what should be paid, then it impacts every employer in California because [it] impacts their rates."
An attorney representing Trudy M., however, is confident that his client committed no crimes and that an October 2008 ruling allows non-hospital companies such as Implantium to charge over $250 per device.
Both Trudy M. and Tigran S. are facing nine felony charges each, and could face up to 13 years in prison and up to $450,000 in fines if convicted.
Stay tuned for updates on this case from our workers' compensation defense blog ...
This post was provided for informational purposes only and is not to be construed as legal advice. Names have been withheld to protect the identity of the parties.
Source:
The San Jose Mercury News, "Rare charges accuses CEO of over-billing San Jose for spinal implants," Mike Rosenberg, April 26, 2012
]]>Here, the Senate committee was responding to a recent eye-opening report by the Government Accountability Office, which determined that OSHA took an average of almost eight years to implement new safety regulations.
The GAO report also found that OSHA has implemented only 11 new safety rules since 2000, as compared with 47 during the 1980s and 1990s. In addition, auditors determined that at least 25 percent of the safety rules approved by OSHA since 1981 took over a decade to implement, and that the agency lags far behind other federal agencies (the Transportation Department, Environmental Protection Agency, etc.) in terms of efficiency.
According to OSHA officials, the delays in the adoption of work safety rules can be largely attributed to onerous procedural requirements, external pressure from business/industrial groups, a higher standard of judicial review and constantly changing priorities.
]]> "We have created barriers based on false alarms, and the need now is to lower them so that worker protection can proceed again without delay," said Michael Silverstein, former director of the OSHA program in Washington state at the committee hearing. "It is no exaggeration to say that lives are at stake."Committee members were understandably outraged by the findings, saying that these delays more than likely contributed to work injuries and, even worse, fatalities.
"It is simply unconscionable that workers must suffer while an OSHA rule is mired in bureaucracy," said committee chairman Senator Tom Harkin (D-Iowa).
One possible solution advanced by the GAO report is for OSHA to join forces with the National Institute for Occupational Safety and Health (NIOSH) more frequently or for Congress to consider amending the standard of review for OSHA safety regulations.
Stay tuned for further updates in the area of workers' compensation defense law ...
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
Insurance Journal, "OSHA hit for taking too long to adopt workplace safety rules," Sam Hananel, April 23, 2012
]]>The case in question involves the Hutterites, a Protestant-based religious group that can be found in German-speaking colonies scattered throughout Canada and the United States, and who live a religion-centered lifestyle similar to that of the Amish or Mennonites. There are roughly 50 Hutterite colonies in Montana, each of which has roughly 100 people.
While Hutterites primary make their living producing agricultural products in Montana, they have also recently made ventures into private construction -- an area in which they are very skilled. However, the Hutterites views on labor have put them at odds with the state and the construction industry in general.
Specifically, they do not carry work comp insurance, claiming that since their workers don't make wages (all money goes to the community) and don't file work comp claims (they have a community medical trust set up), they don't need to maintain work comp coverage.
]]> "Their core belief is that they have no property. All the property and labor they have, they contribute to the colony," said Ron Nelson, the attorney representing the Big Sky Hutterite colony.State officials and private contractors, however, believe that this position often gives the Hutterites an unfair business advantage since they are able to routinely outbid their competitors who have higher costs because of the need to pay work comp premiums.
Interestingly, the Big Sky Hutterite colony recently challenged Montana's law mandating work comp coverage for all employers, arguing that it was a violation of their religious rights.
The state court judge ultimately sided with the Hutterite colony, and the state of Montana appealed to the Montana Supreme Court, where arguments on the matter were held just last week.
Here, Montana Attorney General Stuart Segrest argued that the state's work comp law only regulates commercial activities -- something which the Hutterites entered into voluntarily -- and does not interfere with any religious matters.
"They're not allowed to become a law unto themselves," he argued.
The Montana Supreme Court has yet to make a decision in the case.
Stay tuned for developments in this intriguing case ...
If you are an uninsured employer facing a real problem -- prospective fine, prosecution, an employee injury or litigation -- there are steps that can be taken to minimize the consequences. In these difficult circumstances, you may want to consider consulting with an experienced legal professional.
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
Insurance Journal, "Montana high court hears Hutterite labor case," Matt Volz, April 27, 2012
]]>John A. and Camille A. are the proprietors of Hallmark Roofing based in Belmont, California. According to the officials with the California Department of Insurance (CDI), the couple engaged in a systematic pattern of fraudulent activity concerning employee payroll and work comp premiums.
Specifically, CDI investigators determined that from 2007 to 2011, Hallmark Roofing (acting through John A. and Camille A.) underreported several hundred thousand dollars in payroll and failed to pay $630,000 in work comp premiums. Furthermore, they found that the company failed to make an accurate report of employee wages to the state Employment Development Department from Jan 1, 2010 through Jan. 1, 2012.
]]> CDI officials indicated that these unlawful activities gave Hallmark Roofing an unfair business advantage that enabled them to work in the so-called "underground economy." Specifically, they were able to routinely outbid their competitors who had higher costs due to their decision to comply with state law."Business owners who operate unfairly in the underground economy will be brought to justice," said Insurance Commissioner Dave Jones in a released statement. "I commend the excellent work of the investigators in this large-scale case and in our ongoing efforts to bring fairness to the bidding process."
Both John A. and Camille A. were arrested back on April 19 on $50,000 warrants and were released after posting bail the same day. The San Mateo District Attorney's Office has charged the couple with 24 counts of work comp fraud and five counts of tax evasion. If convicted, they could each be sent to prison for up to five years and fined more than $1 million.
The couple's arraignment is currently scheduled for May 22.
If you are an uninsured employer facing a real problem -- prospective fine, prosecution, an employee injury or litigation -- there are steps that can be taken to minimize the consequences. In these difficult circumstances, you may want to consider consulting with an experienced legal professional.
This post was provided for informational purposes only and is not to be construed as legal advice.
Stay tuned for further developments in the area of workers' compensation defense law ...
Source:
The San Mateo Daily Journal, "Couple hit with 29 felony charges" April 24, 2012
]]>This is the case with a 35-year-old California fireman from Costa Mesa who has been charged with workers' comp fraud after allegedly filing false claims from December of 2008 to May of 2011, collecting compensation for more than two years. The source does not list the reason behind his workers' comp filings or the injuries he alleged to have sustained.
]]> In addition to his job as a firefighter, the man was an aspiring mixed martial arts fighter with a record of 12 victories and two losses. His compensation claims may have come into question when it was learned from his fight record that he was involved in seven fights throughout the two-year period in which he allegedly filed workers' compensation.The martial arts fighter was arrested earlier this month at his home and charged with four felony counts of insurance fraud by the Los Angeles County District Attorney's Office.
He was released after posting $30,000 bail and his arraignment is set for May 1. If convicted as charged, it could mean that his 12th career victory on March 24 may be his last and he could face up to five years in the county jail.
If you are questioning a worker's comp claim filed by an employee, it's important to speak with an experienced workers' compensation employment defense lawyer who will take the actions necessary to protect your business from wrongdoing.
Source: ABC News, "L.A. Firefighter on Workers' Comp Was MMA fighter," Susanna Kim, April 23, 2012
]]>For those unfamiliar with National Safety Month, it essentially assigns each week in June a specific safety theme complete with fact sheets, handouts and other materials designed to help employers raise awareness and cut down on the number of injury claims.
"Each June, the National Safety Council encourages organizations to get involved and participate in National Safety Month," reads the association's website. "NSM is an annual observance to educate and influence behaviors around the leading causes of preventable injuries and death."
The four topics being addressed in National Safety Month this year include employee wellness, ergonomics, fall prevention and safe driving.
]]> Interestingly enough, our work comp defense blog has previously explored two of National Safety Month's safety topics in great detail.Ergonomics, Week 2: While many employers may be tempted to think the issue of ergonomics is confined solely to those who work in office settings, this is not the case. In general, ergonomic issues are classified as "disorders of the soft tissues, specifically of the muscles, nerves, tendons, ligaments, joints, cartilage, blood vessels and spinal discs." Typically, they are caused by working in physically awkward positions for a prolonged period of time, repetitive motions and overexertion.
Accordingly, employees in virtually all industries can suffer serious injuries because of improper ergonomics. The National Safety Council advises employers to inform themselves of the common symptoms associated with ergonomic disorders -- including clicking, swelling, numbness, pain, loss of strength in grip, etc. -- and take steps to ensure that employees' workstations are properly designed.
Fall prevention, Week 3: According to the National Safety Council, over eight million trips to the emergency room here in the U.S. can be blamed on some sort of fall. In fact, many of these falls occur at places of work, where certain risk factors -- not clumsiness -- are to blame.
In order to prevent these kinds of work injuries, the National Safety Council advises employers to consider the following steps:
Stay tuned for further developments in the area of workers' compensation defense law ...
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
Risk & Insurance, "Try weekly plan to increase safety, decrease workplace injuries," Laura Walter, April 19, 2012
]]>As it turns out, airline workers in charge of operating baggage handling vehicles are sometimes involved in serious accidents caused by a variety of factors. Compounding problems further is the fact that many of these baggage handling vehicles -- which can travel at very high rates of speed -- are not equipped with seatbelts.
In fact, back in February 2011, Delta Airlines was cited and fined by the Occupational Health and Safety Administration (OSHA) for safety violations involving an employee who was killed when he was ejected from a baggage handling vehicle. Specifically, the agency punished Delta for failing to provide its workers with the necessary personal protective equipment -- seatbelts.
Interestingly, OSHA and Delta announced earlier this week that they had reached a settlement/compliance agreement concerning the installation of seatbelts in baggage handling vehicles.
]]> Under the terms of the compliance agreement, Delta has exactly two years to outfit all of its baggage handling vehicles with seatbelts and to train its workforce on how to properly use them.Specifically, the seatbelt installation and training will take place during the first year, covering 90 Delta airport sites across the nation, 16,000 employees and 6,000 baggage handling vehicles. In the second year, Delta will enforce the policy, and retain the services of safety consultants to monitor progress and report back to OSHA.
"OSHA's corporate-wide settlement agreements are highly effective tools for ensuring that companies address hazards that can injure or kill their workers," said Dr. David Michaels, Assistant Secretary of Labor for OSHA. "This kind of widespread change within corporations can go a long way toward keeping workers across the country safe and healthy at the end of every workday."
It is worth noting that OSHA is now alerting all other airlines of the need to prevent serious or fatal work injuries by installing seatbelts on baggage handling vehicles via hazard letter.
Stay tuned for further developments in the area of workers' compensation defense law ...
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
EHS Today, "Buckle up: Delta Air Lines, OSHA sign seatbelt compliance agreement for baggage vehicles," Laura Walter, April 16, 2012
]]>Interestingly, employers in office settings may want to take a closer look at a new product by electronics giant Philips, which can help cut down on the number of work-related injuries caused by improper ergonomics, including neck strain, back pain, eyestrain and even carpal tunnel syndrome.
]]> The product is not a new computer or handheld device, but rather a new 24" LCD desktop monitor.How exactly can this computer monitor prevent the aforementioned work injuries?
Embedded within the top of the display -- where the lens for the webcam is typically located -- is something called the "ErgoSensor."
The ErgoSensor helps ensure proper ergonomics by monitoring a computer user's body position and distance from the monitor, alerting them if their posture is not ergonomically correct. To illustrate, the ErgoSensor may tell a worker that they are perhaps sitting too close to the monitor or slouching in their chair.
Workers then have the option of either adjusting the display or repositioning themselves to the proper sitting position.
Interestingly enough, this is not all the ErgoSensor can do regarding the prevention of work injuries. It also has a built-in timer that reminds workers when to take a slight break in order to prevent eyestrain.
It remains to be seen whether this technology will catch on among employers or perhaps be seen as somewhat intrusive.
What are your thoughts?
Stay tuned for further developments in the area of workers' compensation defense law ...
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
The Atlantic, "The computer monitor that can tell if you're slouching," April 10, 2012
]]>To illustrate, consider a case out of Sacramento, where a California Highway Patrol officer was arrested earlier this week and charged with workers' compensation fraud.
According to reports, CHP Officer Tony Y. claimed to have suffered a back injury on May 13, 2011, while participating in firearms training at the CHP Academy and subsequently filed a claim for work comp benefits on August 11, 2011. In the aftermath of the back injury, he was assigned to an administrative position, meaning one with minimal physical exertion.
Over the next few months, Tony Y., 38, informed his treating physicians that his back pain was so debilitating that he was unable to perform even the office work required by his new administrative position. Consequently, the physicians recommended major back surgery.
]]> However, a subsequent investigation by the CHP Office of Internal Affairs Workers' Compensation Fraud Investigation Unit provided video surveillance of Tony Y. engaging in physical activities that should have been impossible due to the severity of his purported back injury.Interestingly, the investigators also determined that Tony Y. had not been using the training equipment that he said was responsible for his work injury on the day in question and that he had not disclosed a previous back injury he suffered in a non-work related car crash.
"It is a sad day for the CHP when something like this happens," said CHP spokesperson Fran Clader.
Tony Y. is currently on administration leave pending completion of an internal investigation.
Workers compensation fraud/employee fraud is a very serious crime. If you suspect that such a crime has been perpetrated against your organization, you should strongly consider speaking with an experienced workers' comp defense attorney.
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
The Sacramento Bee, "CHP officer accused of workers' comp insurance fraud," Cathy Locke, April 11, 2012
]]>Interestingly enough, however, this is exactly what seems to be occurring in the Hacienda La Puente Unified School District in Industry.
A few weeks back, 52-year-old Julio S. was arrested and charged with insurance fraud following a comprehensive investigation by the California Department of Insurance.
Specifically, authorities are alleging that Julio S., who worked as a campus security officer for the school district, claimed to have suffered a serious knee injury that prevented him from working. However, investigators purportedly uncovered evidence of him working as a private security guard for another business while collecting work comp benefits from the school district.
As it turns out, over the past year, the Hacienda La Puente Unified School District has seen at least four other cases of workers' compensation fraud.
]]> According to reports, these include the following:Workers compensation fraud/employee fraud is a very serious crime. If you suspect that such a crime has been perpetrated against your organization, you should strongly consider speaking with an experienced workers' comp defense attorney.
This post was provided for informational purposes only and is not to be construed as legal advice. Names have been withheld to protect the identity of the parties.
Source:
The San Gabriel Valley Tribune, "Hacienda La Puente Unified employee arrested for insurance fraud; sixth fraud case in district," J.D. Velasco, March 30, 2012
]]>What exactly constitutes employee fraud?
In general, when employees suffer debilitating workplace injuries -- back strain, neck trauma, foot pain, hand injury, etc. -- they turn to workers' compensation insurance for the funds they will need during their recovery. However, while the majority of injured workers submit legitimate work comp claims, there are some who will either fake or exaggerate the extent of their injuries, willfully submitting a fraudulent claim.
Interestingly, Employers Insurance -- a work comp provider that insures small business throughout the U.S. -- recently released a list of common indicators of potential work comp fraud that employers need to remain on the lookout for year round.
]]> "While these are simply indicators, it has been shown that when many of these factors are present, there is a good chance the claim may be fraudulent," said the company.Some of these indicators include the following:
"Understanding these indicators by taking a smart, informed approach to workers' compensation insurance not only protects valued employees and minimizes risks for the long term, it also protects businesses from taking on new costs," said Employers Insurance.
Workers compensation fraud/employee fraud is a very serious crime. If you suspect that such a crime has been perpetrated against your organization, you should strongly consider speaking with an experienced workers' comp defense attorney.
This post was provided for informational purposes only and is not to be construed as legal advice.
Source:
The Orange County Register, "Ten signs of workers comp fraud" March 29, 2012
]]>In January 2011, Juan B., a 22-year-old employee from Guatemala, was killed when he fell into an industrial dough mixer at the Tortilleria Chinantla and became caught in the machine's massive churning instruments.
Last August, officials with the Occupational Health and Safety Administration (OSHA) completed their investigation into the incident, issuing Tortilleria Chinantla eight citations totaling more than $62,000 for various workplace safety violations.
Six of these OSHA citations were for "serious" violations, while another was for a "willful" violation, meaning it was "committed with intentional knowing or voluntary disregard for the law's requirements, or with plain indifference to worker safety and health."
(Willful violations are the most serious type of violation handed down by OSHA and are punishable by a fine of $42,000.)
In recent developments, it appears as if the owner of the Tortilleria Chinantla is once again facing a serious legal problem. However, this time the legal problem has nothing to do with the fatal workplace accident, but rather with the failure to provide the necessary work comp coverage.
]]> News reports indicate that Erasmo P. was arrested last week and charged with multiple crimes, including filing false tax documents, failing to pay overtime wages and failing to contribute to workers' compensation insurance.New York Attorney General Eric Schneiderman made the decision to pursue charges against Erasmo P. after reviewing the findings of a comprehensive investigation performed by the New York State Workers' Compensation Board.
"My office is committed to vigorous enforcement of the laws protecting New York's workers," said Schneiderman. "We will aggressively pursue employers who violate labor laws, including criminally when appropriate."
Erasmo P. was released without bail and pled not guilty to the charges. In fact, his attorney has already stated that the charges were unnecessary and likely the result of political maneuvering.
"We think that they are really using Mr. [P.] as an example or as a posterboard for other small businesses that don't have workers' compensation," said attorney Manuel Portela.
Stay tuned for further updates in the area of workers' compensation defense law ...
If you are a California employer facing a real problem -- prospective OSHA fine, prosecution regarding work comp coverage, an employee injury or litigation -- there are steps that can be taken to minimize the consequences. In these difficult circumstances, you may want to consider consulting with an experienced legal professional.
This post was provided for informational purposes only and is not to be construed as legal advice. Names have been withheld to protect the identity of the parties.
Source:
The New York Daily News, "Tortilla factory owner arrested after probe by AG Schneiderman" March 28, 2012
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