The Expense Constant is a fee charged on every Workers Compensation policy, regardless of the policy size. It is a fixed, flat expense charge that is applied in addition to the premium developed for that policy, usually ranging between $100-$300.

This arbitrary amount is ultimately the cost for administering the policy and is based on the fact that the expense factor on such risks is inadequate to cover the cost of issuing and handling the policy.

I was just reading an article in Forbes Magazine. The most popular drug prescribed today is Hydrocodone - better known as Vicodin. I am sure that everyone involved with Workers Comp has seen this drug often prescribed for any type of pain. As it is a generic, it is a very low priced drug.

I looked to see if Hydrocodone was included in any of the $4 prescription programs. It was not. Hydrocodone seemed to be very popular a few years ago in Workers Comp. I have two friends that are Pharmacists. One of them works the night shift. They both say that it is the most heavily sought out drug for drug seekers, especially at night. Many people have stomach problems as it is so harsh to the system.

The most disturbing fact about Hydrocodone is a panel of FDA advisory physicians recommended an immediate ban on the drug. The FDA is waiting to see what to do on the matter.

What to do? Their own advisory panel said to ban it. What are they waiting on to close the drug down?

Continuing with the medical term of the day, we’ll look at something that is similar to DeQuervain Tenosynovitis, but far more known and talked about overall.

Your Carpal Tunnel is a narrow passageway bound by bones and ligaments on the palm side of your wrist. This tunnel protects a main nerve to your hand and nine tendons that bend your fingers. If pressure if placed on this nerve, you will experience numbness, pain, and hand weakness.

Possible causes can include other health conditions, such as arthritis, diabetes, menopause or pregnancy. Repetitive use or injury of the tendons in the hands and wrists also increase pressure within the carpal tunnel. People using power tools, such as jackhammers or chain saws can experience carpal tunnel, as well as those who move heavy assembly line work.

If you’re experiencing mild symptoms of carpal tunnel, you can ease your discomfort by taking frequent breaks to rest your hands. For more extreme cases, wrist splinting, medication, and surgery are options.

Fortunately, for most people who have carpal tunnel syndrome, proper treatment usually relieves the pain and numbness and restores normal use of wrists and hands.

Another prevalent injury seen in the workers comp field is spine fractures. Our most recent case of this resulted from a fall out of semi-truck, but we have seen a wide array of painful vertebral fractures.

One new popular treatment is Kyphoplasty. It is a minimally invasive procedure that can alleviate up to 90% of pain caused by compression fractures. Kyphoplasty also stabilizes the fracture, restores height and reduces deformity.

The procedure is minimally invasive, using only two small incisions and a probe placed into the vertebral space. The bone is drilled and a balloon, called a bone tamp, is inserted on each side. The balloons are then inflated and removed, leaving a cavity for orthopedic cement to be placed. The cement restores height and stability to the vertebra, and reduces pain.

Kyphoplasty is very similar to Vertebroplasty, used for more simple injuries, where physicians use image guidance to inject cement instead of balloons. Both are new promising technologies that increase a patient’s functional abilities, allowing them to return to their previous level of activity without any form of physical therapy or rehabilitation, a benefit to the patient and their employer.

The State of Maine has come up with a novel plan to identify companies/individuals that are construction subcontractors and not employees. The twelve rules for an business entity to be considered a subcontractor are spelled out in the: (more on this in the next post)

APPLICATION FOR PREDETERMINATION OF CONSTRUCTION SUBCONTRACTOR TO ESTABLISH A REBUTTABLE PRESUMPTION

A “construction subcontractor” is defined as a person who performs construction work on a construction site for a hiring agent if the person satisfies all of the following criteria:

(1) The person possesses or has applied for a federal employer identification number or social security number or has agreed in writing to carry out the responsibilities imposed on employers under this chapter;

(2) The person has control and discretion over the means and manner of performance of the construction work, in that the result of the work, rather than the means or manner by which the work is performed, is the primary element bargained for by the hiring agent;

(3) The person has control over the time when the work is performed and the time of performance is not dictated by the hiring agent. Nothing in this paragraph prohibits the hiring agent from reaching an agreement with the person as to a completion schedule, range of work hours and maximum number of work hours to be provided by the person;

(4) The person hires and pays the person's assistants, if any, and, to the extent such assistants are employees, supervises the details of the assistants' work;

(5) The person purports to be in business for that person's self;

(6) The person has continuing or recurring construction business liabilities or obligations;

(7) The success or failure of the person's construction business depends on the relationship of business receipts to expenditures;

(8) The person receives compensation for construction work or services performed and remuneration is not determined unilaterally by the hiring agent;

(9) The person is responsible in the first instance for the main expenses related to the service or construction work performed; however, nothing in this paragraph prohibits the hiring agent from providing the supplies or materials necessary to perform the work;

(10) The person is responsible for satisfactory completion of the work and may be held contractually responsible for failure to complete the work;

(11) The person supplies the principal tools and instruments used in the work, except that the hiring agent may furnish tools or instruments that are unique to the hiring agent's special requirements or are located on the hiring agent's premises; and

(12) The person is not required to work exclusively for the hiring agent.

A “hiring agent” is defined as a person that hires or contracts with a person to perform construction work, but excludes an owner or occupant of real property who hires a person or persons to perform construction work on that real property.

One thing we rarely cover in our blog is medical terms. We’ve had a lot of questions surrounding different injuries and so for the next few posts, we are going to define some of the more common claims in the workers comp industry.

DeQuervain's Tenosynovitis is a painful inflammation of the tendons on the thumb side of your wrist that occurs when the tendons around the base of the thumb are irritated or constricted. If you have DeQuervain’s Tenosynovitis, you’re likely to feel discomfort every time you turn your wrist, grasp anything, or make a fist.

The causes of DeQuervain's Tenosynovitis are unknown, but any activity that relies on repetitive hand and wrist movement is associated with the disease. People diagnosed tend to be those whose jobs involve repetitive hand and wrist motions, such as carpenters, office workers and musicians.

Treatment for DeQuervain’s Tenosynovitis may range from immobilizing your wrist and taking medication to surgery in more serious cases.

DeQuervain's Tenosynovitis is one of the most common disorders reported in worker’s comp as a result of cumulative trauma, but it can be prevented. Make sure you keep your hands in neutral positions and avoid wide grasps and repetitive triggering with thumbs and fingers. As with all workers comp claims, prevention is key.

Most of you are probably wondering how this can be considered a workers comp term, but it is a great example of the types of medical injuries claimed by employees in workers compensation.

We are currently working on a case in which a truck driver missed a step and fell, suffering a tibial fracture. The injury resulted in dead muscle in his leg and gangrene. Debridement, which The Free Dictionary defines as “surgical removal of foreign material and dead tissue from a wound in order to prevent infection and promote healing” then became key to the man keeping his leg.

While not pleasant, it shows the utmost importance of workers safety and the extreme problems that workers and employers will face if precautions and plans of actions are not in place.

The largest concern that we have with Medical Only files is not the normal files. In our reviews, we almost always see a few or many festering medical only claims. The file has made a turn for the worse and the proper investigation is delayed as the medical only adjuster's job is to facilitate the timely payment of medical bills, not adjust the file. They are usually overloaded with hundreds upon hundreds of files.

The other situation we see with festering medical only claims is when the employer has not informed the medical only adjuster that the file is now becoming a more serious matter.

The backstop for both of these situations is when the file reaches a large amount of medical payments and the file pops up on the carrier's or TPA's radar. These can turn out to be very expensive files in the long run.

As I have posted very often, an employer that has online access to their Workers Comp claims will usually have a great advantage. While it is the job of the adjusting staff to watch over claims that are becoming more serious, the employer can call attention to the claims that are reaching large $ amounts but are not classified as lost time files. One of the huge red flags is a very large medical bill or bills with numerous dates of treatment.

As the title indicates, knowing your medical only adjuster or adjusters makes the process of alerting the carrier of TPA to a more serious medical only. An email to the medical only adjuster with a cc: to the lost time adjuster works very well. It is not a good idea to assume the claims adjusting process will take care of itself.

All of our clients do know who their Workers Comp lost time adjusters and medical only adjusters are on their company's files and have realized premium savings on this simple tip.

Allocated Expenses are expenses charged to a Workers Comp file that are not indemnity or medical benefits. Allocated Expenses are associated with the adjusting of the file. Expenses for defending claims such as attorney fees, private investigators, independent medical exams, and many others are considered Allocated Expenses.

There is a great deal of confusion on where to classify certain charges to the file such as rehabilitation nurses hired by the carrier and medical bill review charges. As there is no concrete standard, some allocated expenses are charged under medical expenses and vice-versa.

The Excess Loss is the amount of a Workers Compensation claim that exceeds the Primary Loss - usually $5,000. The Excess Loss does not affect the EMR/E-Mod/X-Mod as much as the Primary Loss on a dollar-per-dollar basis. The Excess Loss is still an important factor in determining the premium amount.

As with the Primary Loss part of the Workers Comp claim, the amounts are based on the Total Incurred associated with the claim.

A large number of our clients have received our heavy recommendation to get to know their lost time claim adjuster(s). The adjuster(s) have a huge effect on your company's Workers Compensation premium. We are often brought in as consultants to discuss the files with the claims adjusters.

One group of personnel that almost no employer or risk manager establishes a working relationship with is the Medical Only adjuster. Why is this so important? I have coined the term - festering claims. The Medical Only adjuster is the person that are usually handling the more serious medical only claims. The Medical Only adjuster also handles the claims by paying the medical bills on a very large group of claims. I have rarely seen a carrier where the lost time adjuster handles medical only claims.

I have seen so many serious claims not being handled properly as there seems to be a communication breakdown when the lost time adjuster is not handling the file. The employer will inform the lost time adjuster of a development on a medical only file. The lost time adjuster then has to hand off the info to the medical only adjuster. Often the necessary attention for a "festering file" is not given.

The file will then not have the proper investigation initiated until the loss control on the file is beyond repair. This type of file is much worse than a file that has had the attention of the lost time adjuster since day one.

I am not blaming anyone. This is just the nature of the beast in the Workers Comp claims industry. The claims industry is a sink or swim business. I will cover more on the medical only adjuster in my next full post.

This is one of the most important terms involving the premiums your company pays for Workers Comp insurance.

Primary Loss - The part of any loss that weighs very heavily on your E-Mod or X-Mod. In almost all cases, it is the first $5,000 of the Total Incurred, not spent, on each Workers Compensation claim. As mentioned often in this blog, Total Incurred = $ Spent + Outstanding Reserves.

Our new Communications intern - Caitlin has made some excellent recommendations for the blog. We now encourage our readers to make comments on the articles. You may go back as far as you wish to make comments on my posts.

We used to allow comments back in 2007, but a very large insurance carrier did not like one of my posts and the comments. I removed that post and stopped the comments. I will now moderate the comments as applicable.

Thanks for reading the posts!!!

The loss run is a listing of all Workers Comp claims that a carrier or TPA provides to its insured. The loss run can be ad-hoc (on demand), monthly, or quarterly. The virtual loss run is when the employer can access their claims data by signing into an online system.

The loss runs usually include the injured employee's identification data; the total paid, reserved, and total incurred. There may also be a short claims status from the adjuster on the report.

Online claims data is very critical to properly manage the Workers Comp claims. If you are not receiving your loss runs call your agent immediately.

For my numerous newsfeed readers, our Feedburner tanked for two weeks. We had to change due to Blogger not accepting FTP posts after 5/1/10. Everything should be back to normal. I hope.

I was wrong. If you happen to be one of our RSS (reader) subscribers, you may not be receiving my newest posts since 5/1/10. We changed our blog webpage and the RSS link was supposed to forward, but it did not - especially if you use the Google Reader. Whew!!!! Arrrrgghhh!!! My apologies.

You may want to resubscribe to our new subdomain blogs.cutcompcosts.com Thanks.

In many of the LinkedIn and other discussion boards on Workers Compensation, the comments are flying. There is a supposed insider memo from the CMS that indicates how the drugs that are disapproved by Medicare Part D should not be allowed in the future medical calculation of the Medicare Set-asides.

I read this in a supposed healthcare/Workers Comp expert blog. That is a dangerous slippery slope to start quoting insider confidential memos as real. One of my good friends and a reporter out of WV refuses to quote "confidential sources." I have also decided to take this same tact, so I will not comment on it further.


I then saw later today that many publications quote this as fact. There was an official memo - not an insider source? Whew! As we have all seen, the CMS can evaluate any claim with any value and it must be accepted.

If the claimant and his/her attorney are going to settle their file and one of their current and future medications are not on the approved Medicare Part D list, then their settlement demand, of course, is going to increase by the present value of that amount. The amount is not just not going to disappear.

As I have mentioned often, employers call or email us with this question more than any other by far. The insurer is usually preparing to cancel the employer as they have not paid their premium audit bill timely. I received an email with this exact concern just before I wrote this post.

We usually respond - If you owe it, then you owe it, and if you do not owe it, then you do not - if there is a good reason to dispute the premium audit.

The rule in any state is that the employer must pay the undisputed part of the premium audit bill. We usually see on the premium audit bills some type of statement that says - Please pay or dispute in 10 days.

Your company actually has more than 10 days in most states as the time limit to dispute an audit is usually at least 30 days. In the Workers Comp policy, hidden in the back pages is the same statement limiting your company's time to dispute or pay to 10 days. The state insurance laws have the final say.

This blog is full of advice on how to handle this situation. The main thing to not do is to file the bill away in a drawer and ignore it.

The paid without prejudice period occurs when the Workers Comp adjuster decides (where legal) to begin paying indemnity and medical benefits without accepting an accident as compensable. Many jurisdictions have a specific form that is filed with the governing body to allow the accept/deny decision to be forestalled until a complete investigation can be completed.

Many attorneys, carriers, and TPA's discourage this method of payment. I, however, have always seen this as a great risk management tool. The pay-without-prejudice period can be extended for up to 90 days.

Indemnity Only Settlements are when the Workers Comp adjusters settle the compensation payments part of the claim. The medical part of the claims is left open for the employee's lifetime.

With the CMS's Medicare Set-asides (MSA) becoming so prevalent, Indemnity Only Settlements are now becoming more popular than ever. I think it is a very bad risk transfer technique. I may be old school, but I do not see the reason in most jurisdictions to settle the indemnity and leave the medical part of a Workers Comp claim open forever. A proper MSA analysis submitted to the CMS would likely increase the settlement somewhat, but that would be better than just leaving open the most expensive part of any Workers Comp claim.

Whenever I mention this in presentations or conversations, I have been told that it is a good way to close out part of the claim. Why pay to close a part of the claim that becomes less of a risk upon a return to work? There are some states that will not allow an indemnity only settlement.

I had been recently informed by a Risk Manager for one of the largest public entities in the US that annuity settlements will preserve the requirements of the CMS/MSA. I will cover that in the next few posts.

Worksheet prepared by the Workers Comp premium auditor, can be either hand-written or computerized, showing how the auditor arrived at the payroll numbers that are used to determine the audited premium.

As the insured, you have the right to see all of your premium auditor's workpapers including if any checklist is used by the auditor. Almost all workpapers are presently computerized.

When something comes across my radar screen from my original home state, I always make sure that I read it over closely. According to the Tulsa World - Oklahoma's second largest city - Tulsa - has seen their Workers Compensation payments double from 2003 through 2009.

The increase in payments for Workers Comp could be attributed to a more liberal court or just a run of bad luck. However, the reporter noted that one item of interest is the apparent correlation between workers' compensation claims and job separation. Of the 503 individuals to receive workers' comp payments from the city's sinking fund in budget year 2009, almost 40 percent are no longer listed on the city payroll.

This is one of the cardinal sins of Workers Comp. Laying off workers while they are drawing temporary total disability benefits is very serious. Most states will consider the worker to be at a permanent total status if they are not considered for a return to work.

One would think that the human resources administration for the City of Tulsa should be quizzed on the number of terminations while on compensation. This is not a hard one to figure out.

Our blog provider - Blogger - made a drastic change on 5/1/10. We decided to change our blog system. Due to the complexities of changing our blog to another provider, we decided to stay with Blogger for the near future.

Our old posts were being blogged to a Blogger hosted area, which allowed very limited access. We will be uploading them to our website over the next few days. Our new website for the blogs will be blogs.cutcompcosts.com.

This post is more of a question and answer - What state was the first to enact Workers Compensation laws? Maryland enacted the first set of Workers Comp laws in 1902. All states had Workers Comp laws by 1942.

Maryland was not the first place to have Workers Comp laws enacted - Germany was the first in 1884. The Sickness Insurance law paid indemnity to all private wage earners and apprentices, including those who work in the agricultural and horticultural sectors and marine industries, family helpers and students with work related injuries, for up to 13 weeks (for the first 4 weeks at 50 % of prior wages, from the fifth week on the benefit was 66.7 % with 50 % paid by the sickness fund and 16.7 % by the accident fund). Workers who are totally disabled get the benefits at 67 % after this 13 week period that is paid by the accident funds, financed entirely by employers. The German compensation system has been taken as a model for many nations.

These old German laws are striking as there are so many state Workers Comp laws which are still very similar.

Lag Time is a very simple Workers Comp term. It is a measurement of how quickly the employer reports an injury to the insurance carrier or TPA. A longer lag time is money the employer is throwing down the drain. Many studies have shown that employers with longer lag times pay more in Workers Comp premiums.

I have received a few emails recently and have seen posts on LinkedIn about what information should be shared with employees on the Workers Comp system. The following is a guide that is provided by the North Carolina Industrial Commission. This is a great publication that is updated every year. All states have the same type of publication.

BULLETIN

North Carolina Industrial Commission
Administering the Workers’ Compensation Act
STREET ADDRESS
Dobbs Building · 430 North Salisbury Street
Raleigh, North Carolina 27603-5937
MAILING ADDRESS
4340 Mail Service Center
Raleigh, North Carolina 27699-4340

Internet Address: http://www.ic.nc.gov/

APRIL 1, 2010

Information About
The North Carolina
Workers’ Compensation Act

North Carolina Industrial Commission
Beverly Eaves Perdue, Governor
Pamela T. Young, Chair

Bernadine S. Ballance, Commissioner
Staci Meyer, Commissioner

Laura K. Mavretic, Commissioner
Christopher Scott, Commissioner

Danny L. McDonald, Commissioner
Dianne C. Sellers, Commissioner

Barbara Levine, Administrator

Tracey Weaver, Executive Secretary

Workers’ Compensation Information Specialists:
(800) 688-8349, (919) 807-2501. Fax: (919) 715-0280

Claims Section:
(919) 807-2502

Mediation Section:
(888) 242-5757
(919) 807-2586

Commissioners:
(919) 807-2500

Medical Billing Section:
(919) 807-2503

Computer Support:
(919) 807-2591

Medical Rehabilitation Nurses Section:
(919) 807-2616

Deputy Commissioners:
(919) 807-2500

Occupational Disease Section:
(919) 807-2502

Docket Section:
(919) 807-2504

Safety Section:
(919) 807-2603

Executive Secretary:
(919) 807-2576

Statistics Section:
(919) 807-2506

Fraud Investigations:
(888) 891-4895
(919) 807-2570

Workers’ Compensation Information Specialists Section:
(800) 688-8349
(919) 807-2501

FOR ANSWERS TO QUESTIONS…

About:

Telephone:
General questions and disputes in cases; statistics; coverage information; forms Workers’ Compensation Information Specialists: (800) 688-8349, (919) 807-2501, (919) 807-2506
Filing and case status Docket Section: (919) 807-2504
Application of the Act, Settlement Agreements, Change of Physicians Executive Secretary: (919) 807-2576
Appeals, Rules, and Policies Commissioners: (919) 807-2500
Medical Bill Approvals Medical Billing Section: (919) 807-2503
Medical Fee Schedule http://www.ic.nc.gov/ncic/pages/feesched.asp, (919) 807-2503
Rehabilitation Assistance Medical Rehabilitation Nurses: (919) 807-2616
Workplace Safety Programs Safety Section: (919) 807-2603
Hearings in Contested Cases Docket Section: (919) 807-2504
Pending Occupational Disease Claims Occupational Disease Section: (919) 807-2502
Bulletin (919) 807-2506
Form Agreements, Attorney Fees Claims Section: (919) 807-2502
Personnel and Contracts Chair’s Office: (919) 807-2526
Workers’ Compensation Fraud Fraud Section: (888) 891-4895, (919) 807-2570
Mediation of Claims Mediation Section: (888) 242-5757, (919) 807-2586
Please Note…

This bulletin is designed to give general information only. It is not a law book. Further information may be obtained by writing a letter to the Executive Secretary or Workers’ Compensation Information Specialists, North Carolina Industrial Commission, or by consulting with an attorney of your choice, which may be at your expense. If you need assistance locating an attorney in your community who is familiar with workers’ compensation law, you may contact the N.C. Bar Association’s nonprofit Lawyer Referral Service: http://www.ncbar.org/publicpro-bono/lawyer-referral-service.aspx. Just telephone toll free in North Carolina to (800) 662-7660—or dial (919) 677-8574 from out of state or from the Raleigh/Durham/Chapel Hill area—to obtain the name of an attorney willing to discuss your question for a nominal fee or no fee. Mention workers’ compensation when requesting a referral. When writing or calling the Commission about a specific case, always give the name of the injured employee, the I.C. file number for the claim or the employee’s Social Security Number, and, if available, the name of the employer and date of injury.

Bulletins and Forms

Bulletins and forms may be obtained by visiting the N.C. Industrial Commission’s web site: http://www.ic.nc.gov/. See http://www.ic.nc.gov/ncic/pages/feesched.asp to view portions of the Commission’s Medical Fee Schedule online. To buy the complete North Carolina Workers’ Compensation Medical Fee Schedule in electronic format, telephone Ingenix, Inc. at (800) INGENIX (464-3649), option 1, or go to http://www.shopingenix.com/ to order a CPT® code book online.

EMPLOYERS’ OBLIGATION TO OBTAIN AND MAINTAIN COVERAGE

Businesses covered by the Workers’ Compensation Act are required by law to obtain insurance or qualify as self-insureds for possible compensation liability to their employees. All businesses employing three (3) or more employees on a regular basis are covered, except that agricultural employments with fewer than ten (10) regular employees, certain sawmill and logging operators, and all domestic employees are exempt. Businesses with any employee whose work involves the use of or presence of radiation are required to have coverage. Corporate officers, partners, and owners who are employed in the business may be exempted from coverage. However, corporate officer/employees are counted in determining whether the business has three or more employees. Sole proprietors and partnerships who have three (3) or more employees must purchase coverage for these employees and may elect to include coverage for themselves.

How to Obtain Workers’ Compensation Insurance

If you are subject to the Act, you are required to carry workers’ compensation insurance. To obtain workers’ compensation insurance, contact your insurance agent about your coverage needs and the types of coverage available to you.

Types of Workers’ Compensation Coverage

There are three (3) types of workers’ compensation coverage:

An insurance agent can write coverage solely for your business.

You can become a member of or contributor to a Self-Insured Fund. A Self-Insured Fund is a “blanket coverage” of workers’ compensation insurance in which you pay into a large fund which provides the coverage for your business and all those who pay into that fund. Your contribution to the fund is based on your number of employees, the rate assigned to them by the North Carolina Rate Bureau, and your payroll.
EXAMPLE: You are a General Contractor who is subject to the Act. A Builders Association offers a Self-Insured Fund program. You become a member of the Builders Association and thus pay into their fund for coverage on your business.

You can become Self-Insured. To become Self-Insured, you must go to the Department of Insurance and post bond showing that you have the financial means to provide coverage for your employees.
NOTE: There is a difference between being Self-Insured and being part of a Self-Insured Fund. Many people mistakenly think they are Self-Insured but actually have coverage through a Self-Insured Fund.

How Your Workers’ Compensation Insurance Premiums Are Set

The North Carolina Rate Bureau, (919) 582-1056, sets rates for specific types of employment, and bases premiums on $100.00 of payroll. Policies are written annually, and premiums may increase if there is an injury and may decrease if there is not one. Premiums also increase or decrease based upon the number of employees and the payroll. (In a Self-Insured Fund, if there is an injury of an employee of one of the other contributors to the fund, their contribution to the fund increases, but the other members’ contributions do not increase unless they have an injury.)

INJURIES COVERED

Employees are entitled to benefits if, while carrying out activities for the benefit of their employer, they suffer an injury by accident, a “specific traumatic incident,” resulting in a hernia or back injury, or an “occupational disease.” An “accident” is an interruption of the regular work routine and the introduction of unusual circumstances, such as a slip, trip, fall, or other unusual activity, likely to result in unexpected consequences. A “specific traumatic incident,” as defined by our courts, includes “injuries that occur during normal work activities.” The claimant need not show “an instantaneous occurrence” or “an external cause or unusual conditions.” However, “injuries that occur gradually, over long periods of time, are not specific traumatic incidents.” If the work-relatedness of a hernia is disputed, an employee must show that the hernia appeared suddenly following an accident and did not exist prior to the accident or incident. All injuries must “arise out of and in the course and scope of” the covered employment to be compensated.

Businesses complying with the Act and their employees may not be sued in the Courts by employees for work-related injuries, except for intentional assaults and conditions so grossly unsafe as to make injury substantially certain. Businesses may obtain the benefits and protections of the Workers’ Compensation Act by purchasing compensation insurance, by being self-insured, or by joining a self-insurance fund.

OCCUPATIONAL DISEASE

Generally, an employee is entitled to benefits for disability due to a condition to which the employment significantly contributed, or if the employment was a significant factor in causing the disease’s development, and if the employment exposed the worker to a greater risk of contracting the disease than the public generally. Where an employee is exposed to the same injurious agent at the place of business of more than one employer, the claim should be filed with the employer on whose premises he was last injuriously exposed.

GIVING NOTICE TO EMPLOYER AND FILING CLAIMS

To obtain benefits, an employee or his representative must give the employer written notice of the accident within 30 days, or in instances of occupational disease (excepting asbestosis, silicosis, or lead poisoning) within 30 days of being advised by competent medical authority that the employee has the occupational disease, unless reasonable excuse is made for not giving notice and no prejudice results to the employer/carrier. NOTICE should be given by providing a completed copy of the Commission’s Form 18 to the employer and the Commission. SUBJECT TO CERTAIN EXCEPTIONS, AN EMPLOYEE LOSES THE RIGHT TO CLAIM COMPENSATION UNLESS A CLAIM IS FILED WITH THE COMMISSION WITHIN TWO (2) YEARS AFTER THE ACCIDENT, OR IN CASES OF AN OCCUPATIONAL DISEASE, WITHIN TWO (2) YEARS AFTER DEATH, DISABILITY, OR DISABLEMENT AND BEING ADVISED BY COMPETENT MEDICAL AUTHORITY THAT THE EMPLOYEE HAS AN OCCUPATIONALLY RELATED DISEASE, whichever last occurs; provided, that if the injury is due to exposure to radiation, the two (2) year period runs from the time the employee suffered incapacity and knew or should have known that the disease or condition was caused by his employment. A CLAIM should be filed by sending to the Commission a statement of claim, preferably on the Commission’s Form 18. COPIES should be sent to the employer or its insurance carrier. Claimants using informal statements will be asked to complete forms requiring information necessary to process the case.

EMPLOYERS’ OBLIGATION TO RECORD AND REPORT INJURIES

All work-related injuries requiring medical attention (other than first aid at the work place) should be reported by the employer to its insurance company or administrator, who will report the injury to the Industrial Commission on I.C. Form 19 if the injury results in more than $2000.00 in medical expenses or more than one day’s lost time from work. A COPY OF THE COMPLETED FORM 19, WITH “IMPORTANT INFORMATION FOR EMPLOYEE” ON THE BACK, MUST BE FURNISHED TO THE EMPLOYEE OR HIS OR HER SURVIVORS. In addition, the employer is required to provide a blank Form 18 for use by the employee with the copy of the Form 19.

BENEFITS

Wage Replacement and Cash Benefits

Temporary Total Disability: If the employee remains unable to earn wages after the first seven (7) days of disability, the employee is entitled to weekly benefits equal to two-thirds (2/3) of his or her average weekly wage up to the maximum compensation rate. After disability has continued more than twenty-one (21) days, the employee is entitled to receive compensation for the first seven days of disability. The days counted do not have to be consecutive. Weekend days, holidays, and any workday in which the injured employee does not earn a full day’s wages because of the injury are counted as a day of disability, even though the employee may earn some wages.

Temporary Partial Disability: If upon obtaining post-injury employment, if employee is unable to earn wages as great as those earned pre-injury, the employee is entitled to compensation equal to two-thirds (2/3) of the difference between the post-injury and pre-injury average weekly wages, so long as the amount does not exceed the statutory maximum weekly benefit. Temporary partial disability benefits may not continue beyond three hundred (300) weeks from the date of injury, and any number of weeks wherein temporary total disability benefits were paid will be deducted from the 300 week maximum.

Permanent Partial Disability: If, at the end of the healing period, there is a permanent impairment to one of the parts of the body listed below, the employee may receive a set period of benefits without regard to his ability to earn wages. Total loss of use of the part entitles the employee to two-thirds (2/3) of his average weekly wage, times the number of weeks shown following the body part below. Benefits for less than total loss are figured on a percentage basis. For example, twenty percent (20%) of 45 weeks’ compensation is nine (9) weeks. Alternatively, in cases where the employee has a permanent impairment to one of the parts of the body listed below and is unable to earn wages as great as before the injury, the employee may choose the greater benefit of (a) benefits for two-thirds (2/3) of the wage difference for a period not to exceed 300 weeks from the date of injury or (b) benefits for a set period based on the permanent impairment. The 300-week period, however, will be reduced by the number of weeks Temporary Total Disability compensation was paid.

Thumb 75 weeks Arm 240 weeks
First or index finger 45 weeks Foot 144 weeks
Second or middle finger 40 weeks Leg 200 weeks
Third or ring finger 25 weeks Eye 120 weeks
Fourth or little finger 20 weeks Hearing (one ear) 70 weeks
Great toe 35 weeks Hearing (both ears) 150 weeks
Any other toe 10 weeks Back 300 weeks
Hand 200 weeks
The percentage of disability is determined based on physicians’ ratings of the percentage of physical impairment. If there is a dispute between physicians regarding ratings, the Commission will determine the percentage of disability. If either party is dissatisfied with the treating physician’s rating, it may obtain the “second opinion” of another doctor. The employee, upon approval by the Commission, is entitled to a single second opinion rating by a doctor of his or her choice at the employer’s expense. To obtain the Commission’s Rating Guide, see “Bulletins and Forms” above. If, however, the employee is unable to earn any wages in any employment, the employee may discuss ongoing disability benefits with the employer or its insurance carrier; or, if there is a disputed issue, the employee may file a Form 33 to request a hearing.

Total and Permanent Disability: The loss of both hands, both arms, both feet, both legs, or both eyes, or any two thereof, constitutes total and permanent disability, and entitles the worker to weekly benefits and medical compensation during his or her lifetime.

Disfigurement and Damage to Other Organs: If the injury leaves facial or head scars that seriously disfigure the person, or causes the loss or permanent injury to an important organ of the body, the employee may be awarded additional compensation not to exceed $20,000.00. The maximum payable for serious bodily disfigurement is $10,000.00. No compensation is allowed for scars where the employee is paid for loss or partial loss of use of the same member. The employee is also entitled to payment for disfigurement due to the loss or crowning of permanent teeth.

Figuring the Compensation Rate: The weekly rate of compensation cannot be less than $30.00 nor more than $834.00 for injuries occurring after January 1, 2010. The maximum weekly benefit is adjusted annually to equal approximately 110% of the average North Carolina wage. This rate of compensation remains the same during the life of the claim. (The maximum weekly compensation rate was $704.00 for 2005, $730.00 for 2006, $754.00 for 2007, $786.00 for 2008, and $816.00 for 2009.) The average weekly wage is usually computed by averaging all wages earned by the employee in the employment in which the employee was injured (including overtime, paid holidays, special allowance for board, lodging, etc.), during the 52 weeks prior to the injury. If the employee has lost more than seven (7) consecutive calendar days at one or more times, these days are excluded from the calculation. If the employee has worked only a short time in the employment in which injured, or for other reasons this formula does not fairly reflect earnings, the Industrial Commission will compute a fair average weekly wage for the employee as provided by the Act. If the employee is under eighteen (18) years of age, a different rate may apply (see “Minors and Incompetents” below). The Commission’s Claims Section can calculate the average weekly wage from information submitted on the Commission’s Form 22. [To view or print this Form 22 and other PDF versions of NCIC forms, you must first download and install a FREE Adobe® Acrobat® Reader.]

Medical Compensation

Employers must provide, and injured employees must accept, all reasonable medical, surgical, hospital, nursing, and rehabilitative services, and medicines, sick travel, and other treatment, including medical and surgical supplies, as may reasonably be required to effect a cure or give relief, and tend to lessen the period of disability, and any artificial members as may reasonably be necessary at the end of the healing period, which are needed due to the compensable injury. The costs of medical compensation are in addition to the disability benefits discussed in the preceding section, and do not offset or reduce them. If the employer denies liability or fails to provide treatment, or in the case of an emergency, the employee may select the physician or hospital but must promptly request Industrial Commission approval.* The employer or its insurance carrier may select the treating physician and other providers of medical compensation, subject to contrary orders of the Commission. If the employee is dissatisfied with the services rendered by providers selected by the employer, the employee may request the Commission order a change of treatment, or approve treatment by providers of employee’s selection.* Such request should state reasonable cause and be submitted with any medical opinions or records that support the request, and a copy of the request should be simultaneously sent to the employer or its insurance company. If an employee fails to cooperate with a provider selected by the employer after being ordered to do so by the Commission, compensation may be suspended while such refusal continues.

The right to medical compensation ends two years after the last payment of medical or indemnity compensation unless, prior to the expiration of this period, a Form 18M application is filed by the employee showing the substantial risk of the necessity of future medical treatment, and is thereafter approved by the Commission.

As a final note, rules governing rehabilitative services in workers’ compensation cases have been adopted and may be obtained through the Industrial Commission if needed.

*Requests for Industrial Commission approval must be made in writing and should be directed to the Executive Secretary’s Office, 4333 Mail Service Center, Raleigh, NC 27699-4333.
Death Benefits

Death benefits are payable when an employee dies due to an occupational disease, due to an accident if the death occurs within six (6) years thereafter, or within two (2) years of the final determination of disability, whichever is later. THE CLAIM MUST BE FILED WITHIN TWO (2) YEARS OF THE DATE OF DEATH IN THE NAME OF THE DEPENDENTS OR NEXT OF KIN OF THE DECEDENT EMPLOYEE. IT SHOULD NOT BE FILED FOR THE ESTATE BY THE EXECUTOR OR OTHER PERSONAL REPRESENTATIVE OF THE DECEASED. Death is compensated by payment of two-thirds (2/3) of the decedent employee’s average weekly wage, or the maximum compensation rate for a minimum period of 400 weeks; $3,500.00 for actual funeral expenses, payable to the person or firm actually entitled to it; and any medical expenses incurred due to the mortal injury or disease. A minor child or disabled spouse may receive more than 400 weeks of benefits.

Minors and Incompetents

An employee under the age of 18 is entitled to receive the same benefits as other employees if injured. For the purposes of calculating compensation for a minor’s permanent disability, death, or temporary total disability for a period exceeding 52 weeks, the minor’s average weekly wage shall be considered to be the same paid to adult employees employed by the same employer at the time of the accident in a similar or like class of work to which the injured minor employee would probably have been promoted to if not injured.

No time limitation under the Workers’ Compensation Act runs against a minor or incompetent until a guardian or trustee has been appointed to represent their interests or the minor reaches legal age. The Commission may appoint a guardian ad litem, for the purpose of pursuing the claim on behalf of the minor in litigation before the Commission. However, a guardian ad litem may not receive cash compensation on behalf of a minor or incompetent. Compensation may be received by natural guardian (a parent with whom the child lives), a general guardian, or guardian of the estate of a minor or incompetent appointed by the Clerk of Superior Court of the county in which the employee resides; by the trustee or committee having powers over the employee’s financial affairs; by the Clerk, if small sums are due an incompetent; and, when both a surviving spouse and minor children are entitled to receive compensation due to the death or injury of a deceased employee, the surviving spouse may receive the compensation for the use of both himself/herself and the minor children. In certain circumstances, a minor employee may sign agreements and receipts for payments of compensation although the Commission may require the signature of a parent or person standing in place of a parent.

DENIAL OF A CLAIM

An employee who submits a written claim (I.C. Form 18, or its equivalent), in a case where no compensation has been initiated by the employer to the employee, is entitled to a detailed statement from the employer or insurance carrier of grounds for denying the claim within 14 days of receipt, unless time is extended by the Commission’s Executive Secretary’s Office. The employee desiring a hearing on the claim before the Industrial Commission should make the request on the I.C. Form 33. A statement making a claim or requesting a hearing must be received by the Commission within two years of the date of injury to preserve the employee’s right to pursue the claim. If the claim or request for hearing is not made on the Commission’s official forms (Form 18, Form 33R, or Form 33, respectively), claimant will be asked to complete those forms.

AGREEMENTS TO PAY COMPENSATION

All agreements to pay compensation must be approved by the Commission. The most common forms of agreements are the I.C. Form 21 for the initial period of disability, the I.C. Form 26 for subsequent periods of disability, and the Compromise Settlement Agreement (or “clincher”) under which the employee receives a lump sum of money and payment of any remaining medical compensation bills in return for terminating the claim and any right to reopen it.

(In cases of direct pay or pay without prejudice, a Form 60, Employer’s Admission of Employee’s Right to Compensation, or a Form 63, Notice To Employee of Payment Without Prejudice, should be submitted as soon as the employee becomes entitled to compensation. A copy should be sent to the employee, and the original of the form should be sent to the Industrial Commission.)

A Form 21, Agreement for Temporary Total Disability or Temporary Partial Disability, should state that the compensation is payable for the “necessary” period unless for some reason the period of temporary total disability or temporary partial disability is actually known (such as when it has already ended). The agreement may be submitted subject to future correction of the compensation rate used. Unless the employee successfully returns to work, dies, or enters into another agreement, the employer or carrier must apply to the Commission to terminate the compensation on the Commission’s Form 24 or request a hearing once the Form 21 has been approved.

A Form 21 or 26 agreement may be entered into after the end of the healing period to provide for payment of temporary partial disability benefits or permanent partial disability benefits based upon a doctor’s evaluation, or “rating,” of any remaining physical impairment. The employee is entitled to a single second opinion by a physician of his or her choice at the employer or carrier’s expense when the physician approved by the employer or carrier has rated and/or released the employee. The employee retains the right to reopen the case for further benefits within two years of the last payment of compensation if the employee can show that there has been a substantial change in the condition that resulted from the compensable injury.

The Compromise Settlement Agreement, or “clincher,” provides for payment of all cash benefits and medical compensation due, and an additional sum in return for the employee’s giving up his or her right to reopen the case based upon change of condition.

MEDICAL AND LEGAL FEES

Attorney’s Fees

It is unlawful for any attorney or other person to accept a fee, gift, or any remuneration for any services rendered in connection with the claim of a worker seeking compensation unless such fee or other consideration has been approved by the Industrial Commission.

Fees for Medical Compensation

Subject to the provisions of N.C. Gen. Stat. §97-25.3, Preauthorization, the Industrial Commission shall adopt and publish a Fee Schedule, pursuant to the provisions of N.C. Gen. Stat. §97-26(a), fixing maximum fees, except for hospital fees pursuant to N.C. Gen. Stat. §97-26(b), which may be charged for medical, surgical, nursing, dental, and rehabilitative services, and medicines, sick travel, and other treatment, including medical and surgical supplies, original artificial members as may reasonably be necessary at the end of the healing period and the replacement of such artificial members when reasonably necessitated by ordinary use or medical circumstances. The fees prescribed in the applicable published Fee Schedule shall govern and apply in all cases. However, in special hardship cases where sufficient reason is demonstrated to the Industrial Commission, fees in excess of those so published may be allowed. Persons who disagree with the allowance of such fees in any case may make application for and obtain a full review of the matter before the Industrial Commission as in all other cases provided. Copies of this published Medical Fee Schedule may be obtained by telephoning Ingenix, Inc. at (800) INGENIX (464-3649), option 1, or going to http://www.shopingenix.com/ and ordering a CPT® code book online.

A provider of medical compensation shall submit its statement for services within seventy-five (75) days of the rendition of the service; or, if treatment is longer, within thirty (30) days after the end of the month during which multiple treatments were provided; or within such other reasonable period of time as allowed by the Industrial Commission. However, in cases where liability is initially denied but subsequently admitted or determined by the Industrial Commission, the time for submission of medical bills shall run from the time the health care provider received notice of the admission or determination of liability. Within thirty (30) days of the receipt of the statement, the employer, or carrier, or managed care organization, or administrator on its behalf, shall pay or submit the statement to the Industrial Commission for approval or send the provider written objections to the statement. If an employer, carrier/administrator, or managed care organization disputes a portion of the provider’s bill, it shall pay the uncontested portion of the bill and shall resolve disputes regarding the balance of the charges through its contractual arrangement or through the Industrial Commission. If any bill for medical compensation services is not paid within sixty (60) days after it has been approved by the Industrial Commission and returned to the responsible party, or when the employee is receiving treatment through a managed care organization, within sixty (60) days after the bill has been properly submitted to an insurer or managed care organization, there shall be added to such unpaid bill an amount equal to ten percent (10%), which shall be paid at the same time as, but in addition to, such bill, unless late payment is excused by the Industrial Commission. When the ten percent (10%) addition to the bill is contested, any party may request a hearing by the Industrial Commission pursuant to N.C. Gen. Stat. §§97-83 and 97-84.

When the responsible party seeks an audit of hospital charges, and has paid the hospital charges in full, the payee hospital, upon request, shall provide all reasonable access and copies of appropriate records, without charge or fee, to the person(s) chosen by the payor to review and audit the records.

The responsible employer or carrier/administrator shall pay the statements of medical compensation providers to whom the employee has been referred by the authorized treating physician, unless said physician has been requested to obtain authorization for referrals or tests, provided that compliance with such request does not unreasonably delay the treatment or service to be rendered to the employee.

A health care provider may not pursue a private claim against an employee for all or part of the costs of medical treatment that have been provided to that employee unless (1) the employee’s claim for treatment is finally adjudicated to be non-compensable or (2) the employee fails to request a hearing following a denial of liability by the employer. Subsequent to an unanswered denial of liability or an adjudication that the treatment is non-compensable, the insurer (or self-insured employer) is liable to any medical care providers whose services had previously been authorized by the insurer or employer.

MOST FREQUENTLY ASKED QUESTIONS

Who is required to provide workers’ compensation coverage?
Any employer who employs three or more employees.

NOTE: Every executive officer selected or appointed and empowered in accordance with the charter and bylaws of a corporation is considered an employee of such corporation. For example, a corporation with two officers and one employee would be required to provide workers’ compensation coverage. Any employer in which one or more employees are employed in activities that involve the use of or presence of radiation is required to have coverage.

What if my employer does not have workers’ compensation insurance?
The employee should report the lack of workers’ compensation insurance or approved self-insurance to the NCIC Fraud Section and, if injured, should file a Form 18 and Form 33 with the Commission.

What must an employee do when an injury occurs?
Report the injury to the employer, orally and in writing, immediately and in any event within 30 days.

What should be done if the employer fails or refuses to report an injury?
Employee should file a claim (Form 18 or 18B) within two years of the accident with the Industrial Commission.

Who provides and directs medical treatment?
The employer or its insurance company, subject to any Commission orders, provides and directs medical treatment. The employee may petition the Commission to change physicians or approve a physician of employee’s selection when good grounds are shown. However, payment by the employer or carrier is not guaranteed unless written permission to change physicians is obtained from the employer, carrier, or Commission before the treatment is rendered.

Chiropractic Rules:
If the employer grants permission to seek medical treatment from a chiropractor, the employee is entitled to 20 visits if medically necessary. If additional visits are needed, the chiropractor should request this authorization from the employer.

When can reimbursement for sick travel be collected?
If employees travel 20 miles or more round trip for medical treatment in workers’ compensation cases, they are entitled to collect for mileage at the rate of 25 cents a mile for travel prior to June 1, 2000; 31 cents a mile for travel between June 1, 2000 and January 17, 2006; 44.5 cents a mile for travel between January 18 and December 31, 2006; 48.5 cents a mile for travel between January 1 and December 31, 2007; 50.5 cents a mile for travel between January 1 and June 30, 2008; 55 cents a mile for travel between January 1 and December 31, 2009; and 50 cents a mile for travel on or after January 1, 2010. Special consideration will be given to employees who are totally disabled.

Note: The Industrial Commission has given the self-insurers and insurance carriers permission to pay drug and travel expenses directly to the employee without approval from the Commission.

What happens if, in an emergency, the employer fails or refuses to provide medical treatment?
The employee may obtain the necessary treatment from a physician or hospital of his own choice, but must promptly request the Commission’s approval.

When do I become eligible for lost wage compensation?
No compensation is due for the first seven (7) days of lost time unless the disability exceeds 21 days. Therefore, the first check will not include payment for days 1-7. Payment for those days will be made should the disability continue beyond 21 days.

How often are compensation payments made?
Weekly, but the Commission can authorize payments on a monthly basis in some circumstances.

At what rate of pay?
66 2/3% of the average weekly wage, not to exceed $834.00* (2010 maximum) per week.

* The maximum weekly benefit is adjusted annually.

How long is the employee eligible to receive lost-time weekly benefits?
Until the employee is able to return to work.

What is permanent partial disability?
Total loss or partial loss of use of a member of the body or inability to earn the same wages in any employment as earned at the time of injury.

Who determines permanent partial disability?
The Commission, based on the impairment ratings of physicians or evidence of consideration of wage earning capacity.

What happens when the employer refuses to acknowledge the claim?
When liability for payment of compensation is denied, the Commission, claimant, his or her attorney (if any), and all known providers of health care shall be promptly notified of the reason for such denial. The denial Form 61 shall not be worded in general terms, but must detail the exact reason for the denial of liability.

If a claim is denied by the insurance company or self-insurer, the employee may request a hearing before the Industrial Commission by submitting a Form 33, Request for Hearing.

Medical providers may bill the employee only after it has finally been determined that it is not a compensable workers’ compensation claim.
NOTICE

THIS BULLETIN IS NOT INTENDED TO ANSWER ALL QUESTIONS REGARDING WORKERS’ COMPENSATION OR ALL PROBLEMS ARISING UNDER THE WORKERS’ COMPENSATION ACT.

For further information, contact:
North Carolina Industrial Commission
4340 Mail Service Center
Raleigh, North Carolina 27699-4340
Need Workers’ Compensation Information? Need Help with a Claim?

For information, help with a claim, or workers’ compensation inquiries—if you have not hired an attorney—call:

Workers’ Compensation Information Specialists:
(800) 688-8349, (919) 807-2501, or Fax: (919) 715-0280

Workers’ Compensation Information Specialists assist unrepresented claimants, employers, and other parties to enable them to protect their rights. In addition, the Workers’ Compensation Information Specialists serve as the information source for the North Carolina Industrial Commission and answer questions pertaining to all aspects of workers’ compensation.

N.C. Industrial Commission · 4340 Mail Service Center · Raleigh, NC 27699-4340
Main Telephone: (919) 807-2500 · Fax: (919) 715-0282
NCIC Home Page: http://www.ic.nc.gov/

A make-work job is a job which has less final benefit than the job costs to support. Make-work is a rather controversial return to work issue for Workers Compensation. Certain states do not allow an employer to create a job just to reduce the length of temporary total or temporary partial benefits period.

To not be a make-work job, the position should have existed before the injury. Numerous court cases in the 1990's set the precedence for make-work. There are many make-work jobs that are created to have the employee get back into a full work week routine after returning from a Workers Comp injury.

I do not necessarily agree that make-work jobs should be seen as illegal. If an injured employee has been out of work for more than a few weeks, they (and the employer) need a break-in period.

The State of North Carolina was the first to make this ruling in the Workers Comp courts in the mid 1990's. In my research, other states have made the same ruling.

I had mentioned the UNISTAT date and report in May 2008. It is worth mentioning again as it is one of the most important reports in all of Workers Comp insurance.

The UNISTAT date is the actual date that the reserves/total incurred is used to calculate your E-Mods. It is not the policy renewal date. We have seen agents, adjusters, and even some underwriters become so very concerned about an employer's Workers Comp policy during the last month of the policy. Other than marketing for the insurance company, the last month of a Workers Comp policy is a useless time to do anything in regards to reducing the reserves on a file.

The UNISTAT report is filed by your insurance carrier with the State Rating Bureau or NCCI to calculate your Experience Mod. The UNISTAT report is one of those kind of "hidden" factors that figures into your Workers Comp policy.

I was reading an article at www.wcexec.com on the recent collapse The Contractors Access Program of California (CAP), a self insured group of contractors, is scheduled to be seized by California's Office of Self Insurance Plans.

The complicating factor is that members of self insured groups are jointly and severally liable for each other's claims and for the claims of the group. The 200 plus mostly small employers in this group will be liable for a reserves shortfall through a special assessment of the members for as much as $12M to $60M. Past members are on the hook for the years during which they participated. I find it fascinating that members that are now not participating can be assessed.

Liberty had held the bond, but cancelled it earlier this year. There is a $15.7 million bond in place for the prior years. The bond figure would only cover a small portion when compared to the size of the self insurance group and the liabilities in place.

Not to throw salt in the wound, but agents that recommended participation in the group can also be liable? It was noted that the agents’ E&O excludes self insurance plan recommendations for their clients. I do not think that blaming agents in necessarily a great thing.

I have received the question very often - why do I mention a state on the west coast when we are on the east coast - what happens elsewhere may not apply to me. As I have said often, what happens in a certain state, especially CA, will be coming to state near you. For example, in our home state of North Carolina, there was a similar situation with a company called GRIT (Government Reinsurance Insurance Trust). They went under and the governmental entities were stuck with their own claims. One of my good friends working for a certain carrier said boxes and boxes of files were brought in by a semi truck to their offices when they agreed to handle them.

Everything in insurance repeats itself over and over, with a slight twist.