Using the California Workers’ Compensation “Employer’s Bill of Rights”

23 Jul

Many employers have been frustrated by workers’ compensation claims – they felt claims were either fraudulent or  improperly paid.  At the least, the employer did not know what happened and was upset by the impact on his experience modification.

In 1993, the California law was changed to give employers tools to deal with these concerns, in two sections of the California Labor Code, entitled the Employer’s Bill of Rights, Sections 3761 and 3762.

What does this all mean from a practical point of view?  If an employer feels a claim is fraudulent, or treatment is out of line, or has some other objection to a claim, such as:

  • the employee started a fight and that fight cause the injury, or
  • the employee was drunk or under the influence of illegal drugs which caused the injury,
  • or claim was filed after the employee was told of a layoff or even after termination.

 He can object in writing – both to his insurer and copy the Workers’ Compensation Appeals Board.  He can also find out the information the insurer has in its files and why it has set its reserves so high.

If an employer uses the law, he can have his own day in “court”.  He can do his own investigation, take his own depositions if needed, call his own witnesses at the WCAB hearing, sit in when the insurance company lawyers talk “settlement” with the lawyer for the injured worker, and object to what he doesn’t like.  And if he prevails, he gets his experience mod money back and his attorneys fees paid by the insurance company as well!

As a practical matter, when I have represented clients on these matters, it usually doesn’t have to go that far, because normally the insurance company, who may have been uncooperative, now gets the message both that the employer has something to say and that he is serious.  However, the rights are there to be used to protect the employer from: post termination claims, fraudulent claims, excessive medical treatment, non-responsive claims departments, etc.

Labor Code Section 3761 provides:

  1. Requiring workers’ compensation insurers to notify employers when a workers’ compensation claim is filed directly with the insurance company.
  2. When an employer notifies it’s insurer that, in the employer’s opinion, no benefits are payable on a claim, the Work Comp. Appeals Board can approve a “compromise and release agreement” only when the employer has been given notice of the hearing on such an agreement.  Failure of the insurer to give notice of such hearing entitles the employer to reasonable expenses
  3. When an insurer establishes a claim reserve which affect’s an employer, the insurer must provide, upon written request, a “written report of the estimated medical legal costs, and itemization of all other estimated expenses to be paid from the reserve. 
  4. When an employer objects to benefits being paid in writing to the insurance company and the Work Comp. Appeals Board, and the Appeals Board determines no compensation is payable, “the insurer shall reimburse the employer any premium paid solely due to the inclusion of the successfully challenged payment in the employer’s experience modification.

Labor Code Section 3762 adds additional protection for an employer by

5.   Requiring the insurer to “discuss all elements of the claim file that affects the employer’s premium with the employer, and supply copies of documents that affect the premium.

6.   The employer is specifically entitled to medical information regarding the diagnosis or physical condition for which workers’ compensation benefits are claimed and the treatment provided, and medical information necessary for the employer to modify the employee’s work duties.

Let’s face it, almost never does an employer write a letter to his or her insurance company, and who ever heard of someone sending a copy to the WCAB?  But, following the process is the key to protecting an employer’s rights under the Employer’s Bill of Rights. The employer can find out what is going on in a claim, the treatment the employee is receiving, and why things are costing so much.  He may even be able to stop a bad claim from being paid.

Don Dressler Consulting has been helping employers exercise their “Employer’s Bill of Rights” and reduce workers’ compensation costs for 10 years.   For more information, visit our web site at http://www.DonDresler.com or contact us by email at DonDresler1@hotmail.com.  Also, visit our website focusing on worker safety: http://www.CalWorkSafety.com

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