Upcoming changes to workers compensation laws and regulation could soon affect some employers’ insurance premiums.
The impacts, if a business experiences any, will not be felt until 2017.
After several sessions with no workers compensation legislation on the table, the Nevada Legislature in 2015 passed a handful of bills that make changes both big and small to the insurance all employers must carry to cover workers on the job.
Jim Werbeckes, vice president of government and regulatory affairs at Employers, the onetime state provider of workers comp insurance, says he worked with business representatives on a couple of the more far-reaching bills.
“We started in the summer of last year and started with 23 items and narrowed it down to six items in two bills,” said Werbeckes, who works in the Reno office of the national insurance provider.
Most of the modifications made by those two bills — Senate Bill 231 and Senate Bill 232 — take effect Jan. 1, 2016.
SB 231 reduces the amount of opiates a physician can prescribe and requires the health care provider to use the original manufacturer’s National Drug Code, which should stop the practice of drug repackaging, in which small amounts of a pharmaceutical are sold separately at higher cost.
The bill requires insurers to pay providers within 45 days of receipt of bill and adds what Werbeckes called a DUI (driving under the influence) statute which allows insurers to deny a claim if the employee tests at .08 percent blood alcohol concentration unless the employee can prove intoxication was not the cause of the accident or injury.
SB 232 lets an insurer recover from a health insurer initial payouts it makes on a claim if a claim is later denied and reverted to a claim with the health care carrier.
The bill also changes the reopening requirements on a claim so that an employee must be incapacitated for at least five days in a 20-day period.
That requirement stems from a recent case in which a worker who was injured and took the rest of the day off but returned to work the following day was able to reopen his claim five years later.
“Nevada has lifetime reopening, we can’t do compromise or release,” in which an employer’s liability ends with a lump sum payment to the employee, said Werbeckes. “We tried to get it but there was no traction.”
Those were the two most extensive bills, but overall there were eight workers comp bills passed during the past legislation, including SB 153 which makes changes to the terms under which police officers and firefighters may make claims on heart and lung disease related to their jobs.
The state Division of Industrial Relations, which oversees workers comp, is also implementing a new medical fee schedule and is holding a workshop on it next week.
“For the most part we didn’t do sweeping changes in methodology,” said Katherine Godwin, medical unit manager with DIR. “We added some different levels of care for inpatient hospitalization, for example, and added an independent medical evaluation and a dental fee schedule.”
The changes do not directly affect employers but could influence their premium rates in 2014.
Whether the new legislation increases or decreases premiums, the best way for an employer to cut workers comp costs is through managing risk, said Jared Rossi, sales executive, LP Insurance Services, Inc. in Reno.
Rossi said a base rate — loss costs — for premiums are set by the National Council on Compensation Insurance.
An employers rate depends on its classification and claims experience. The more dangerous the work, and the more injuries reported, the higher the premium.
“We review trends, see where your issues lie, if you’ve had certain types of claims or if you’ve had multiple catastrophic claims to see what is giving you problems and then create a program around it,” said Rossi.
The goal is minimize risk to reduce claims and lower overall costs.
One important way to do that is to institute a return to work program, said Christi Johnson, workers’ compensation claims consultant, LP Insurance.
“The amount of the claim can be reduced 70 percent if the employee returns to work,” said Johnson. “If an injured employee in manufacturing hurts his arm, say, and has no use of his left arm, the employer can find something else they can do, whether it’s answering phones or filing papers.”
Johnson said she also works with insurers to reduce the amount of money reserved for an employers’ claims, which has an eventual effect on premiums as well.
Rossi said since the rates are set by NCCI and based on a company’s classification, most providers offer similar premiums and policies, sometimes making it hard to differentiate between options.
But he said businesses can look at a provider’s claims management record as well as some nuances in its policies.
“Let’s say a contractor has carpenters and one provider may classify them as straight carpenters and another may classify them as inside carpenters,” if they work primarily indoors, which carries less risk.
“Then they’ll offer a better rate.”