In October, 2006, employers who had bought into a self-insured North Carolina workers’ compensation group fund got some terrible news. The Phoenix Fund’s reinsurance broker, a man named Thomas Raitz, had been engaging in complicated illegal shenanigans to steal from the fund via a money laundering and mail-fraud operation. Investigators from North Carolina’s Department of Insurance concluded that Raitz’s scheme impacted more than $20 million worth of the fund’s money.

Although Raitz was convicted in 2007 after pleading guilty and was subsequently sentenced to nearly 6 years in jail, members of the Phoenix Fund have yet to collect money and damages. Finally, in 2008, Raitz was ordered by the court to pay $19 million to reimburse the Phoenix Fund. To date, Raitz has paid out $18 million, of which $11.5 million has gone to meet the obligations of the fund itself and has not gone to remunerate individual employers. Only $6.5 million collected will be distributed among the injured parties. That said, the North Carolina Insurance Commissioner, Wayne Goodwin, released a statement that sounded a note of optimism for these employers, assuring the victims that they would “get back every available penny” owed to them.

Triangle Business Journal, North Caroilna employers to get $6.5M from Phoenix Fund, August 10, 2009

Workforce Management, Workers’ Compensation Fund Members Hit by Fraud Get Distributions, August 14, 2009

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North Carolina Insurance Commission

North Carolina’s Department of Insurance

On August 26, the National Academy of Social Insurance (NASI) released a comprehensive report on 2007 data regarding overall domestic and state-by-state (including North Carolina) workers’ compensation benefits. Per the NASI, benefit payments across the nation in 2007 equaled $55.4 billion – a 2% increase over the amount paid out in 2006. Cash payments declined by about 10% in California, offsetting the increases in medical and indemnity benefits. All told, roughly half of the total amount paid out – $27.2 billion – went to cover costs of medical bills. That represented an increase of over 3% from 2006. (Health insurance analysts have been digging into the numbers to determine whether they represent a trend or whether the bump might simply be statistical noise.) The rest of the money – $28.3 billion – went to replace wages lost. This amount increased by just 0.08% from 2006. It would thus be statistically unsound to read any meaningful trends into such data.

NASI reported that employers across the US spent a total of about $85 million on insurance for workers’ compensation and other related expenses. (Those figures include employers who self-insure.) So how trustworthy are these data? Since NASI is both non-partisan and non-for-profit, one can safely assume that there’s no political agenda driving the numbers. Of course, calculating precisely how North Carolina workers’ compensation insurance and other types of social insurance ultimately impact the economy can be a complicated business. After all, given the number of non-linear factors involved, it’s tricky to tease out precisely how changes to different variables impact the economy as a whole.

For instance, if the relationship between North Carolina workers’ compensation insurance premiums and North Carolina’s GDP were simple linear, it might be easy to recommend policy solutions. But since these relationships are clearly complex and non-linear, there’s no way to predict precisely how to manipulate, for instance, social insurance premium rates to get desired effects. For more information about the 2007 NASI figures, check out the full report at www.nasi.org.

Business Insurance.com, Workers compensation benefits payments rise modestly: Report, August 26, 2009

PR Newswire, Drop in California’s Workers’ Compensation Spending Slows Growth in National Spending in 2007

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National Academy of Social Insurance

Recent statistics put out by both the US Department Of Labor (DOL) and the Occupational Safety and Health Administration (OSHA) suggest that construction workers are at high risk for suffering on the job injuries that can result in workers’ compensation claims, leading some North Carolina workers’ compensation policy experts to argue that accidents in this sector may be inflating premiums for employers.

According to DOL figures on 2007 construction work related injuries, there are over 250,000 active construction sites in the country, and around 6 million laborers employed. Each year, more than a thousand workers get killed on site. Many times that number get severely injured or traumatized. Construction work often leads to acute injuries, such as brain damage, spinal injuries, and bone and ligament damage, as well as to repetitive stress injuries and soft tissue damage stemming from overuse of machinery, bad ergonomics, and even improper posture.

OSHA also has sounded the alarm. The agency has found that construction site employers and employees alike routinely violate codes for scaffolding safety, protection against falls, helmet use, training, and general safety around ladders, electrical and open pits.

This news concerns many North Carolina workers’ compensation experts because of the anticipated “downstream” effects of these bad practices. When insurance companies pay out large claim amounts to injured construction workers, they must account for that resource drain somehow. Thus, they must raise premiums, cut benefits, or take other actions which can drive employers out of business or imperil the ability of other injured parties to collect on their North Carolina workers’ compensation claims.

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DOL

OSHA

According to a memo dated August 14, 2009, the North Carolina Industrial Commission has changed its policy for compromised settlements. Effective October 1, fees for North Carolina workers’ compensation compromised settlement agreements will be hiked up to $375.00. This change was made pursuant to section 14.15 of a bill passed earlier in the year, Session Law 2009-451. The Chair of the North Carolina Industrial Commission, Pamela Young, along with six commissioners, signed off on this change.

Who might this fee hike impact? Per the NCIC’s memorandum, a wide variety of parties might be affected. These might include self-insured employers, administrators, and carriers. Compromised North Carolina workers’ compensation settlements can get complicated, legally speaking, so it may behoove you to consult with an experienced professional to make sure that you file the correct paperwork to protect your rights as well as the rights of your employees (if they might be impacted by your decisions).

Carriers, administrators, and others who need to stay abreast of day to day changes in North Carolina workers’ compensation law can visit the NCIC website (www.ic.nc.gov) for an updated newsfeed about fee changes, conference bulletins, news, and other relevant information.

North Carolina Industrial Commission, Increase in Fees for Compromise Settlement Agreements

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Compromised settlements

Session Law 2009-451

Per a news bulletin on the NC Industrial Commission’s website, the fourteenth annual North Carolina Workers’ Compensation Educational Conference will be held this year from October 7th through 9th at the Raleigh Convention Center on South Salisbury Street. According to the conference brochure, the purpose of the symposium is to “educate those who participate in the North Carolina workers’ compensation system regarding current rules, procedures, policies, and forms, and to provide an opportunity for dialogue among these participants.”

Various commissioners, attorneys, insurance representatives, and medical professionals will present, and individuals can attend specialized break out sessions during the conference. Registration fees range from $275.00 per person for registrants who pay before 08/15/09 to $350.00 per person after 09/15/09. The proceeds from the conference will be given to the International Workers’ Compensation Foundation, a non-for-profit group that assists with education and research. Certain individuals, such as attorneys, providers, and carriers may be able to collect continuing education credits for attending the conference. (Insurance adjusters may want to discuss any credit issues with the Department of Insurance, which can be reached at (919) 807 6800.)

The North Carolina Workers’ Compensation Education Conference generally boasts a diverse guest list, and discounted rates for groups are available. Attendees often include administrators, employers, HR professionals, attorneys, healthcare analysts and providers, and vocational therapists. This conference is a joint venture put together by the International Workers’ Compensation Foundation and the NC Industrial Commission.

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NC Industrial Commission

International Workers’ Compensation Foundation

Raleigh Convention Center

5. If you were hurt in a car accident on the way to or from work, can you make a workers’ compensation claim?

Answer: Depends on the circumstances. In some cases, it’s easy to make a case. (For instance, a pizza delivery person who gets into an auto accident on the way back from a delivery and suffers spinal cord damage can make a workers’ comp claim AND a claim against the driver who hit him.) Given situations like this, employers should keep their North Carolina workers’ compensation insurance premiums paid and up to date.

6. Can individuals or employers self-insure for workers’ compensation?

Answer: In many cases, yes. Self-employed workers and employers can often self-insure, provided they meet requirements stipulated by NC state law.

7. Can you claim NC workers’ compensation benefits even if your employer was not negligent?

Answer: Yes. Many potential claimants never file for workers’ comp because, in their minds, their employers didn’t “do anything wrong.” (For instance, if an employee crashed his car on the way to a work related event, the employer can hardly be blamed.) But a workers’ comp claim is not the same thing as a personal injury suit. If you’ve bee hurt at work, you can make a claim regardless of whether anyone was at fault. (That said, however, employees cannot generally sue their employers directly for benefits.)

8. How can you learn more about the North Carolina workers’ compensation process?

Answer: The North Carolina Industrial Commission website (www.ic.nc.gov) contains a wealth of information on the subject.

9. Do you need an attorney to collect workers’ comp benefits?

Answer: Not necessarily. However, in many cases, employees can get shortchanged. Insurance companies can use legal loopholes and other unsavory tactics to deny payouts to otherwise qualified claimants. In addition, sometimes employers don’t fully cooperate and even retaliate against workers who file claims. To protect yourself and ensure that you get the maximum remuneration for your pain, suffering, and medical bills, it may behoove you to connect with an experienced, aggressive North Carolina workers’ compensation attorney.

More Web Resources:

North Carolina Bar Association Pamphlet on Workers’ Compensation

NC Workers’ Compensation Law

North Carolina Industrial Commission

When most people think of accidents that merit North Carolina workers’ compensation coverage, they think of catastrophes, like the explosion at the North Carolina Slim Jim plant in June 2009. Acute injuries attract ample media coverage. But overuse injuries stemming from chronic ergonomic effects often don’t, even though they account for a significant slice of North Carolina workers’ compensation claims.

Overuse injuries, such as repetitive stress injuries (RSI), thoracic outlet syndrome (TOS), carpal tunnel syndrome (CTS), “blackberry” thumb, joint and soft tissue damage, and eye strain often take months or even years to develop. But once an employee suffers chronic damage, he or she may find it very difficult to regain functions, find good care, and get enough North Carolina workers’ compensation benefits to pay for medical costs.

Recovering workers often complain that physicians are too quick to prescribe cortisone injections, non-steroidal anti-inflammatory drugs (NSAIDs), and surgeries. At the same time, many doctors who specialize in treatment of these injuries seem not to pay attention enough to more holistic factors, such as trigger points, poor workstation ergonomics, bad posture, and lack of physical activity and work breaks. That’s why it’s so important for injured North Carolina workers to get the facts about soft tissue injuries and to explore their treatment options thoroughly before paying for expensive interventions or agreeing to surgeries that can have permanent negative consequences if they don’t go precisely as planned.

Third Body Found in Slim Jim Plant Explosion Rubble, FoxNews, June 10, 2009

On the Other “Hand”
Repetitive Overuse Injuries of the Hand & Wrist, Hughston Sports Medicine Foundation

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Ergonomic Tips

Thoracic Outlet Syndrome

Whether you’re an experienced North Carolina workers’ compensation insurance adjuster or an NC employee who’s recently been hurt on the job, here are some answers to basic questions you might have about the origins and process of the state’s system.

1. How is workers’ compensation different from long term disability?

Answer: Workers’ comp benefits pay out for injuries sustained during the course of work. Disability benefits pay out for non-work related injuries. For instance, if you lost your hand in an assembly line accident on the job, you’d file a workers’ compensation claim. If, on the other hand, you lost your hand in a non work related context – for instance, while fishing with your family – you would file for disability.

2. Are all companies in the state mandated to carry North Carolina workers’ compensation insurance?

Answer: Most are. Exceptions apply, however. If you’re an employer or prospective employer, and you’re not sure whether or not you need to acquire insurance, the North Carolina Industrial Commission can advise you. You might also consider retaining an attorney. After all, employers who fail to carry enough workers’ comp insurance can be hit with pretty serious penalties if they’re caught, and their personal assets may even be up for grabs in certain situations.

3. If you were hurt and your employer doesn’t have insurance, what are your options?

Answer: It may be possible to make a claim against the company’s assets or against your employer’s personal assets. You also may have other legal mechanisms available to collect payment. Discuss your matter with an attorney.

4. Can independent contractors collect workers’ compensation?

Answer: Independent contractors are not considered employees, according to North Carolina workers’ compensation law. This means that, if a contractor gets hurt while on the job, he is generally not entitled to file a claim against the person or entity who hired him. However, depending on the injury, the nature of the work, and the type of working arrangement, in some situations, independent contractors can make a case. For instance, an independent contractor might argue that he should have been designated as employee and thus should be entitled to collect benefits.

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NC’s Workers’ Compensation Act

Independent Contractor

North Carolina Industrial Commission

Let’s discuss some myths and realities concerning North Carolina workers’ compensation.

Myth #1 — You must see the doctor that your insurance company (or employer) provides.

Reality – In the event that the first North Carolina workers’ compensation physician who treats you does not meet your needs, you can go back to your insurance company or to your employer to request a change of physician. Legally, you’re allowed to do this at least one time, and your employer/insurance company must compensate you for the visit.

Myth #2 — If you fail to file for benefits within your employer’s timeline, you won’t get compensation.

Reality: Employers don’t make North Carolina workers’ compensation laws — the state legislature does. In most cases, you have up to two years following your injury to file a claim.

Myth #3 — Insurance companies will cooperate if your claim is legitimate.

Reality: Insurance companies are primarily in business to make money. Claims adjusters will likely dig into your claim looking for as many possible reasons to reject it, disqualify it, or erode your settlement amount. In fact, if you discuss your injury with an insurance company representative before speaking with an attorney, you can accidentally imperil your North Carolina workers’ compensation claim — just by misspeaking or citing the wrong numbers. While insurance companies are not always adversarial, they can be. That’s why it’s generally smart to retain an experienced and intuitive legal representative — someone who’s purely interested in your well-being.

Myth #4 — Retaining an expensive North Carolina workers’ compensation attorney will chip into your benefits.

Reality: The benefits of working with a knowledgeable, results-oriented attorney in general far outweigh the nominal costs of services. Consider: by simply extracting a few extra percentage points on your settlement, you can usually pay for your attorney’s fees and then some. To settle for a fair amount, it makes sense to work with experts who’ve delt with similar cases hundreds of times. Exceptions can apply, of course. For instance, if you’ve closely studied North Carolina workers’ compensation law, perhaps you can negotiate on your own behalf. But even then, you might be advised to retain counsel, since having a proxy negotiate on your behalf gives you extra leverage.

North Carolina Workers’ Compensation Law

NORTH CAROLINA STATE GOVERNMENT
WORKERS’ COMPENSATION EMPLOYEE HANDBOOK

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US DOL Statistics on Workers’ Comp

NC Industrial Commission