Tag Archives: Workers’ Compensation

Prescribed Amounts and other Workers’ Compensation payments for 2014/2015

WorkCover WA releases variations in Prescribed Amounts and other Workers’ Compensation payments for 2014/2015

WorkCover WA today announced the new limits payable under the Act.

Key elements of the revised Prescribed Amounts are:

  • Maximum payment: $212,980.00 (up from $206,742)
  • Medical and hospital expenses: $63,894.00 (up from $62,023)
  • Vocational rehabilitation expenses: $14,909.00 (up from $14,472)
  • Weekly payments: $2,594.20 (up from $2,448.50)

These increases are effective from 1st July, 2014.

Injured employees who are currently in receipt of the maximum weekly compensation of $2,448.50 may be entitled to an increase. You should seek advice from your insurer before making any changes to the approved weekly compensation rate.

The Recommended Prescribed Amount and other Workers’ Compensation Payments for 2014-2015 are available here from the WorkCover WA website.

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Proposed Changes to WA’s Workers’ Compensation Legislation

In Western Australia, the current Workers’ Compensation and Injury Management Act 1981 (the Act) has been amended a number of times and consequently is difficult to understand and apply. WorkCover WA recently published a discussion paper outlining proposals to re-draft the Act. The discussion paper was designed as the basis for consultation with a range of stakeholders in the WA workers’ compensation system, including insurers, rehabilitation providers, lawyers and industry groups.

As an employer advocate, Aurenda made a submission and our perspective on the Review focussed on changes that will particularly impact on the ability of employers to effectively manage their injured employees and the negative impact on claims costs, future premiums and the effective operation of their business.

The scope of the Review is wide and varied, with more than 160 recommendations to ‘improve’ the WA workers’ compensation system.

Some salient points we focussed on are:

  • The Act will not be amended, rather re written with a focus on “plain speech”. We fully support this recommendation.
  • Currently, an injured employee who is in receipt of weekly compensation and commences maternity leave continues to receive their full weekly compensation payments. We propose that weekly compensation should be suspended for the period of the applicable maternity leave period. This is an aspect of the current legislation that clearly contradicts the intent of the legislation, since the injured employee is not able to participate in the return to work process and therefore should not be entitled to compensation during that period. This was not contained within the recommendations – we have asked that this be addressed.
  • Failure to attend or participate in medical reviews arranged under s64 and s65 still requires focus. The Review proposes a consolidation of the sections but does not address any consequence for the non-attendance or participation in the medical reviews. These medical reviews are crucial to an employer in progressing their injury management obligations as well as the general management of the employee’s injury. We recommended an immediate suspension of weekly compensation where there is failure to attend or participate in a medical review that is scheduled under these sections of the Act.
  • The proposal to remove s92(f) as a mechanism to settle and resolve claims is not an option we support. It is crucial to allow both the employee and employer an opportunity to resolve the dispute over entitlement. This provides closure and certainty for the injured employee. It also allows the insurer to close the claim which provides certainty to the employer of impact on their insurance policy.
  • Removal of the common law election period under s93M is proposed. This is not supported as the election provides an understanding of the injured employees’ intentions in respect of their future entitlements (a statutory claim or a common law claim) and this invariably motivates their compliance and return to work motivation. The added benefit of an election is knowing the likely cost exposure of the claim which assists employers with premium negotiations.
  • It is proposed the twelve month time limit of notice of injury be removed (s178). We have not supported that change as the notification allows an employer to manage the injured employee in the workplace to ensure no further injury or aggravation, it also ensures that any changes to the system of work can occur or document the circumstances in the event a claim is made in the future and documentation is required by the insurer. Furthermore, if an employee believes they have a workplace injury why would they not want to report it to their employer within a reasonable timeframe and 12 months is not an onerous timeframe.
  • The proposal to allow people other than doctors to issue medical certificates is not a concept we support. The doctors (treating or second opinion) are key to providing an objective and evidence-based approach to determining an injured employee’s need for treatment and/or incapacity to work. Allowing other allied health providers the authority would diminish the integrity of the system as well as possibly expose the system to rort.
  • The recommendation to allow payment of small claims on a Without Admission of Liability basis to a cap of $750 is a good initiative but clarity will be required on the type of injuries and that it relates to medical expenses claims only.
  • Clarification and simplifying the rate of pay calculation is a welcome initiative. It is likely, however, that will mean there will be no step down rate after 13 weeks incapacity and the step down provides an incentive to motivate a return to work. We recommended an across the board reduction of 15% after 13 weeks incapacity. This is consistent with the approach taken in other jurisdictions.
  • It is proposed an injured employee can receive their permanent impairment lump sum entitlement and leave their claim open to receive the balance of their entitlements. This will increase the costs to the system and contribute to the longevity of claims.   We have opposed this recommendation.
  • Under s69 a Form 6 is required to be submitted if an injured employee is out of the State more than three months. The Review recommends weekly compensation to be suspended until the required form is submitted. We supported this amendment but further clarity on the frequency of the submission of the form is required as well as whether weekly compensation is backdated once there is compliance with the necessary forms evidencing an ongoing incapacity.
  • The proposed revisions of s84AA is pleasing as it addresses some of the ambiguity for an employer when they are terminating employment contracts which, invariably, are not related to the injury or claim process.

The process of ‘reviewing the Review’, amending recommendations, seeking further feedback from stakeholders and drafting a completely new version of the Workers’ Compensation Act will take a great deal of time and commitment from WorkCover and the Government. We are pleased to represent employers’ interests in this significant project.

 

Footnote: Chris White, WorkCover CEO, stated that WorkCover received more than 70 submissions to the Review and that they are impressed with the constructive feedback that has been provided.

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Injury Management is our business

An interesting article was published in Australian newspapers last week. It was the story of a truck driver who works for a mining company in WA. It is a story about rights: the rights of the injured worker and the rights of the employer. Reading the article is seems that there is much confusion out there about the WA Workers’ Compensation legislation. And as the articles title goes to show, for the person who has never had to deal with it, it can be a quagmire of lawyers, committees, departments, insurers and doctors.

http://www.smh.com.au/comment/greg-ross-caught-up-in-work-cover-quagmire-20130827-2sn2c.html

The position we take at Aurenda is that the employer is a mining company. Their core business is mining. They have full intentions of keeping their employees and contractors safe and uninjured. Nobody wants the people who are doing work for them, to be hurt in anyway.

Some mining companies choose to keep their injury management entirely in-house with no reference to external specialists to assist them . As injury management specialists we believe this is toying with danger. As much as they have a human resources department to oversee it, the reality is that these are human resource specialists with a mining focus not injury management specialists.

We can see from this article that the people coordinating the injury management are attempting to do their best with good intentions. The reality is that they just don’t have the experience of a company like ours, where what we do is Workers’ Compensation and Injury Management day in, day out. We have seen just about every possible permeation of workplace injury and a library of case studies to guide us in times when the case is unusual.

A company we work with recently sent us some feedback for one of our injury management managers:

  • Timely communication – quick to notify of any issues (e.g. attendance, non-compliance, performance problems)
  • Quick return of requested documentation (e.g. within a few hours of request)
  • Effective management – takes on board our suggestions, open to feedback and eager and willing to cooperate with Injury Management strategies
  • Solutions-focused approach – rather than taking an obstructive approach re: what can’t be done or why that’s hard, he works with us to find a solution and how he can help

If all these points had been applied to the case highlighted in the newspaper, perhaps the conflict may not have arisen.

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WorkCover WA releases variations in Prescribed Amounts and other Workers’ Compensation payments for 2013/2014

WorkCover WA today announced the new limits payable under the Act.

Key elements of the revised Prescribed Amounts are:

  • Maximum payment: $206,742.00 (up from $198,365)
  • Medical and hospital expenses: $62,023.00 (up from $59,510)
  • Vocational rehabilitation expenses: $14,472.00 (up from $13,886)
  • Weekly payments: $2,448.50 (up from $2,351.80)

These increases are effective from 1st July, 2013.

Injured employees who are currently in receipt of the maximum weekly compensation of $2,351.80 may be entitled to an increase. You should seek advice from your insurer before making any changes to the approved weekly compensation rate.

The Recommended Prescribed Amount and other Workers’ Compensation Payments for 2013-2014 are available here from the WorkCover WA website.

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Hidden costs of a workplace injury

 

Studies place the hidden costs of a workplace injury at 4.5 times the direct cost of the Workers’ Compensation claim.

 

  • How are you estimating the potential costs of your current workplace injuries?
  • Are your people up-skilled in managing the potential indirect costs to your business?
  • Just who is in control of the cost of your workplace injuries?**

 

Give your people the edge in reducing the cost of workplace injury with employer-focused training from Aurenda.

Don’t delay.

Click here to find out more about Aurenda’s Injury Management Coordinator Course.

Email training@aurenda.com or ring Pippa on 6389 8900 for further information.

 

 

Book Now! Some places still available for November (28, 29 and 30).

 

 

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Past-Present-Future: The Actual Impact of Claims Costs on Workers’ Compensation Premiums

A common scenario when we at Aurenda first meet a prospective client is that a poor claims history has led to a whopping increase in the organisation’s workers’ compensation premium. Sure, the immediate consequences of a poor year are often apparent in the direct increase in premium – but have you considered the past and future cost implications as well?

Past

Contrary to popular belief, it only takes one bad year of workers’ compensation costs to have an impact on your workers’ compensation premium, particularly in a hardening insurance market.

  • Higher workers’ compensation costs can be attributed to one or many variables, including:
  • Increase in the frequency and/or severity of injuries
  • Increase in the number of claims as a result of changing business conditions
  • Lack of control over the injury and claims management process
  • Lack of internal responsibility and/or accountability for managing and supervising the recovery of injured workers
  • Failure to provide suitable/ alternate duties in every instance
  • Lack of understanding of the implications of poor injury management
  • Poor communication between the injured worker, employer, medical treatment providers and insurer
  • Poor organisational morale
  • A single claim that blows out because of severity of injury and/or complexity of the issues surrounding the claim

Whilst the primary concern with a premium increase is centred on the immediate financial impact on the bottom line of the organisation, there are very good reasons to remain focussed on the past.

  1. Is there a Claims Experience Discount (CED) for the previous policy period?CEDs can be worth as much as 25% of premium – do you know what your CED is worth? CEDs are paid on a sliding scale – what are the minimum and maximum thresholds for achieving all or part of the CED on the previous policy period? Depending on the actual severity of claims in the previous period, and ratio of paid costs to outstanding estimates, you may still be in a position to obtain some CED from your previous premium at the next insurance renewal.
  2. Future premiums will be calculated on the basis of past claims history.Workers’ compensation is a long-tail insurance product so you need to continue to manage all open claims to achieve the best possible outcome for both the injured worker and your future premium. Outstanding estimates are just that: “estimates”. Anything that can be done to get a better ‘picture’ of the final outcome of the claim in terms of actual paid costs will assist your broker to negotiate the next premium. Finalisation of outstanding claims is obviously the goal, but other strategies can also result in far lower estimates for claims that will remain open over a longer period.

Present

As Tony Robbins says, “If you do what you’ve always done, you’ll get what you’ve always gotten”. Now that you’ve absorbed a massive hit to your premium, what are you going to do about it?

Understanding the reasons for the escalation in claims costs is a good starting point. They could be the consequence of one or many of the reasons outlined above. A note of caution: don’t lay (all) the blame on third parties. The Western Australian workers’ compensation system allows for an incredible amount of employer input and direction into the management of workplace injuries and claims. If, as a business, you are not aware of this or you are not exercising your rights and responsibilities in this area, then you need to understand what they are and how to use them to reduce claims costs – and achieve better outcomes for your injured employees.

In addition, there’s the potential CED on the new premium – likely to be worth much more than last year, now that your premium has increased. Do you know what the financial targets are to achieve the CED? What strategies will you put in place to do something different this year?

Future

Future premiums are affected by past and present claims costs – pure and simple. You may be reeling from a premium increase right now, but if you do nothing to change how you control claims costs going forward, you haven’t seen the worst of it. It can take up to five years of good claims history to counter the impact of one bad year on premiums.

Not only will you face an immediate increase in premium, but the recurring impact means that you may be paying the price for years to come – even without consideration for increases due to the growth of the business.

Of course, the greater the impact you make on reducing claims costs immediately, the lower the potential long-term recurring impact on premiums.

What Now?

Consider the scenario of a company with a gazetted premium rate equating to $250,000. With a 50% loading due to a poor claims history, the actual premium cost is $375,000 in the first year. Assuming that it takes this company five years to get back to their Gazette Rate, the total additional premium paid over that period is $375,000. What could you do with that money?

There are three key factors to address the impact of claims costs on premiums:

  1. Understand which drivers are determining your claims costs – it may be any or all of those outlined above.
  2. Implement specific strategies to counter the individual cost drivers that are impacting your business.
  3. Establish financial targets to reduce claims costs and achieve CEDs – and monitor these targets in conjunction with the people who have responsibility for injury management in your workplace.

As Einstein said, “Insanity is doing the same thing, over and over again, but expecting different results”. Contact Deb Macksy at Aurenda on (08) 6389 8900 or email dmacksy@aurenda.com to discuss how Aurenda can assist you to stop the insanity.

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Workers’ Compensation Payment Amendments for 2012

The annual review of workers’ compensation rates, fees and payments in Western Australia have been published by WorkCover WA. Variations to the Prescribed Amount come into effect on 1 July 2012.

Some of the notable changes include:

The capped amount for weekly earnings has increased from $2,156.60 to $2,351.80 ($112,293.60)

The maximum payment of the prescribed amount (100%) has increased from $190,701 to $198,365.

The amount allocated for capped Common Law has increased from $400,475 to $416,569.

What does this mean for you? If you have workers who are currently on the ‘capped amount’ for weekly earnings, their rates of pay should be reviewed to ensure you are paying them their correct entitlement after 1 July. If in doubt, check with your insurer.

Increases to other entitlements will have an impact on claims costs as they flow through the claims management process, making it more important than ever to ensure that you are managing each and every claim as effectively as possible to mitigate your cost exposures.

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Filed under Aurenda, Insurance premiums, Workers Compensation, workers' compensation amendments