Prompt Reporting of Occupational Injury Claims
Prompt reporting of all insurance claims is a risk management best practice. Some policyholders mistakenly believe the practice of not reporting employee injuries to the insurance company is a wise business decision. The practice of not reporting employee injuries as workers' compensation or non-subscriber claims or in self-administering claims is strongly discouraged.
Most Non-subscriber ERISA plans require the injured or sick employee report their injury on the same day as the injury. Also, the injured employee (or a person acting on his or her behalf) must report every incident or fact that the employee believes results, or might reasonably be expected to result, in an injury. The employee must provide verbal notice immediately after being injured at work to his or her supervisor then on duty, no matter how minor the injury appears to be. For Injury due to an Accident, or for a known exposure to an Occupational Disease, verbal notice must be provided by the end of the work shift for the date of the injury. For an actual injury due to occupational disease or cumulative trauma, verbal notice must be provided within the earlier of (1) 24 hours after being medically diagnosed as a work-related Injury, or (2) 30 days after the Participant should have known of the injury. Any provision in the Plan to the contrary notwithstanding, no benefits are payable under the ERISA plan unless notice of injury is provided by the employee as described above.

There are major benefits for promptly reporting all employee injuries to your company's non-subscriber occupational or workers' compensation insurance carrier:
  1. A major benefit of reporting all claims is that minor claims are "warning bells and whistles" or early indicators of underlying deficiencies in safety management that can be corrected before a major incident occurs.
  2. The prompt reporting of claims allows the claim adjuster to ensure key evidence is preserved and witnesses can be interviewed in completing a timely investigation of the loss to determine compensability and to determine an appropriate plan of action for resolving the claim.
  3. Prompt reporting allows the detection of "red flag indicators" for fraud and determines whether a case should be referred for surveillance or if there is an opportunity to pursue subrogation against a negligent third party.
  4. Most ERISA plans and states have reporting requirements for insureds to report claims on a timely basis and may deny claims or impose monetary fines as penalty for failing to report claims.
  5. By promptly reporting claims, injured employees can be directed to specific providers and employers can take advantage of providing injured employees quality medical care at Preferred Provider Organization clinics.
  6. The prompt reporting of injuries allows medical treatment to occur within specialized occupational medical clinics familiar with treating occupational injuries with a focus on facilitating an early return to work to promote quicker healing.
  7. The improved coordination of care between the employer, clinic, insurance carrier and Nurse Case Manager can drive better injury management and claim resolution outcomes by determining appropriate modified duty assignments for return to work.
  8. A small percentage of medical only cases may turn into indemnity cases due to unforeseen complications resulting from underlying health risks of injured employees or unusual circumstances. A common example includes infections that are slow to heal in diabetic employees or damaged vision from improperly cleaned foreign object in eye claims.
  9. Benefits may be reduced (or altogether denied) if there is confirmed evidence of alcohol or a prohibited drug on a post-incident drug test. 
Conclusion
This guideline is intended to help reinforce the benefits of prompt reporting of all occupational injury claims. Prompt claim reporting is a cost containment best practice.
Please contact us with any questions.

Thank you, 
George Knox, CLU, ChFC
214.695.2904 (mobile) 214.443.1400 (office) | george@insuranceisboring.com

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a 'covered opinion' or other written tax advice and should not be relied upon for any purpose other than its intended purpose.
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