By Jillian Brandt, CIC
OMIC Insurance Agency and Group Products Manager
[Digest, Winter 1998]
Loss of income due to accidents on the job has been a major problem for workers since the industrial revolution. Employers' liability laws, adopted first by Britain in 1880 and later by most other European nations, held employers responsible for injuries caused by defective machinery or by negligence on the part of management. In the United States, workers' compensation coverage increased greatly after Congress passed the Federal Employees' Compensation Act of 1916, which provided benefits for certain federal civilian workers or their survivors in connection with injuries or death on the job. Today, most states require employers, including ophthalmic practices, to provide compensation coverage if they employ more than a minimum number of workers (usually three).
Who is Covered?
Employers are required to provide workers' compensation coverage for all full-time permanent employees and for leased temporary and contract employees, unless separate insurance is provided elsewhere. Usually the leasing or temporary employment agency will provide coverage for employees they lease and charge the employer an inclusion fee. Contract workers can be treated either as a consultant in which the worker is responsible for his or her own coverage, or as a short-term employee in which the employer provides the protection. Additionally, executive officers of a corporation (defined as the president, vice president, secretary, treasurer or spouse) are covered under workers' compensation laws unless, as some states allow, they elect not to be. On the other hand, a sole proprietor or partner is usually not subject to the law but can elect to be covered in most states.
What is Covered?
The purpose of workers' compensation coverage to provide pay and medical benefits to workers who suffer an occupational injury or to their dependents in cases where death occurs. "Occupational injury" is defined in many statues as an injury "arising out of and in the course of employment." Generally translated, this means that for an injury to be compensable, it must arise out or a risk reasonably related to employment or occur while the employee is at work, during work hours and while engaged in work he or she has been employed to do. Injuries that are deliberately self-inflicted or the result of deliberate failure to use safety equipment or of intoxication are not compensable. Claims alleging any type of discrimination are also excluded, as such coverage would be provided under an Employment Practices Liability Insurance policy.
There are four categories of compensation benefits payable to the injured worker or the workers' dependent: medical, disability, rehabilitation and death. Each state has its own
valuation method to determine coverage benefits; however, all states share one common goal: to return the injured worker to health and work as quickly as possible. Injured workers normally receive about two-thirds of their salary while disabled and may be eligible for job training if their injury makes it impossible to return to their previous line of work.
Hazards in the Medical Office
Although medical offices present fewer occupational hazards then many other workplaces, certain types of on-the-job injuries do tend to recur and to constitute the basis of most claims. Typically, these involve repetitive stress injuries such as carpal tunnel syndrome (CTS), back strains, slips and falls, and needle stick injuries. CTS occurs when there is chronic pressure on the median nerve in the wrist area and is most common in workers whose work involves repetitive hand movements such as computer keyboard operators. Because computers are an integral part of the office environment, it is important to take steps to safeguard workers from injury:
- Make sure each computer terminal and workstation is ergonomically designed.
- Educate employees on the importance of posture while sitting at the computer.
- Rotate job duties to allow breaks from data entry.
Most back strain injuries and slips and falls can be avoided if the office is kept clean, organized and free of clutter. Make sure supplies are easily accessible. Stacking items on top of file cabinets might work for long-term storage but is not a good idea for daily supplies. Minimize opportunities for slips and falls by putting everything in a designated place - stress organization so workers are not injured because of carelessness. Needle stick injuries are usually the result of haste. Allow adequate time and care during these procedures to ensure employee and patient safety.
How are Rates Determined?
Insurance companies determine rates for workers' compensation coverage on the basis of an employers' estimated payroll, claims history and anticipated exposure during the current policy period. This information allows the carrier to establish an estimated premium at the beginning of the year. At the policy's expiration, the insured's actual payroll records are audited to determine the final premium, and the insured either pays an additional premium or receives a refund. In most states, payroll is defined to include all remuneration, which means all wages, salaries, commissions, bonuses and paid time off. The average ophthalmic practice spends an amount equal to less than 2% of its payroll.
When employers of like kind come together to insure the exposures of all the group's members, it is called group self-insurance. Group plans are subject to stringent regulatory requirements and can be arduous to set up. An alternative, known as a safety group, also provides group self-insurance but is easier to structure because it requires nothing more than participation of the group's members. OMIC is currently developing a workers' compensation safety group for ophthalmologists through The Hartford Insurance Group. If the group gains wide enough participation among ophthalmologists, it may be able to set rates based on the group's experience along, resulting in lower average premiums than most ophthalmologists now pay.
In 1997, OMIC and the American Academy of Ophthalmology teamed up with The Hartford Insurance Company to offer the first workers' compensation program for ophthalmologists. The program provides coverage for workers' compensation and employers' liability plus loss prevention and claims cost containment services.
For information on OMIC's program, please contact OMIC at (800) 562-6642 or via email, omic@omic.com.
