Who Should Administer Workers' Compensation Claims?

In your organization, who manages your workers compensation injuries? If it is your personnel department, you may want to evaluate that arrangement. In today’s organizations, the administration of workers’ compensation claims is usually done by an insurance purchasing manager or risk manager. 

One reason that specialists tend to handle workers' compensation claims is that an industrial injury is not managed the same way that a group medical claim is administered. After a workplace injury, the following series of investigations and actions must take place immediatly:

• An evaluation of whether the claim arises out of the course of employment
• Cooperation with the insurance carrier, including possible litigation
• A possible OSHA investigation if the injury is serious enough
• The need to take prompt action to control future exposures of this nature

All these items fall outside the normal personnel functions, and handling them in a prompt and thorough manner is crucial.

Employee benefits claim are rarely litigated. Any workers’ compensation injury that results in permanent impairment is generally decided before an administrative law judge. This potential for litigation increases the need to manage the claim from its inception to its conclusion.

Many workplace injuries have the potential for a third-party recovery, as in a case where your employee is injured in a not-at-fault auto accident. This subrogation activity is not a personnel function. In addition, there are times when contractual obligations may make subrogation problematic and this, too, will have to be monitored and negotiated.

Risk-transfer mechanisms such as the purchase of insurance or self-funding some portion of your workers’ compensation are a property-casualty function. The purchase of this type of insurance is also outside the experience of most personnel managers.

There are times, of course, that an employee who loses time from work may be eligible for other benefits such as the Family & Medical Leave Act, long-term disability, or may need special accommodations to return to work. Coordinating such human resource issues requires effective coordination across benefits administrators and other risk-management and HR professionals.

The key to proper management of a workplace injury is strong communication between departments. Forms that alert human resources and payroll of an injury are essential and cooperation to complete required reports is critical. However, most insurance professionals agree: work-related injuries should be managed by those purchasing your insurance, not solely by your human resources department.