WORKERS' COMPENSATION EXPLAINED AT FRIDAY COFFEE

There are several factors contributing to the rapidly increasing costs of workers' compensation insurance, and the problem cannot be solved overnight, guests at the Chamber of Commerce First Friday Coffee were told Friday.

Jack Knowlan, administrative law judge for the Missouri Division of Workers' Compensation, said he was optimistic that legislation passed this year and legislation that will be proposed next year will start bringing the problem under control.

"Why are your rates going up?" asked Knowlan. "It is a problem that goes beyond the state of Missouri; it is nationwide - everyone is looking for solutions."

The increase in medical expenses is a big reason for the rise, and can only be addressed by controlling the increasing costs of health care, said Knowlan.

He said court decisions in recent years have broadened the definition of what can be covered by workers' compensation. The Supreme Court has ruled that to be covered by workers' compensation an injury does not have to be unusual, just sustained while on the job.

There is also a greater awareness of injuries caused by doing repetitive work and more and more claims are being filed for those injuries, said Knowlan.

At the office in Cape Girardeau, which serves 19 counties, Knowlan said there are five employees, including himself. In 1986, when he started his present position, Knowlan said he had 1,600 files; today he has 3,800.

Knowlan explained that there are three categories of payments, with pay limits for claims set by the state legislature.

The first category is temporary total disability, where the employee will miss more than three days of work. Payments are based on two-thirds of the average weekly wage, up to a maximum amount.

The second category, medical aid, covers all medical expenses that are deemed necessary. The employer has the right to select the doctor employees go to, he said.

The third category is permanent partial disability, which involves something like the loss of a limb.

There is also a category for totally permanently disabled, which Knowlan said is difficult to prove.

"In most workers' compensation cases attorneys are not necessary," said Knowlan, with his office serving as the administrative body to process cases.

During a month, Knowlan said he averages six hearings, 100 settlements and several hundred pre-hearing conferences.

Lawrence Kasten, the associate administrative law judge, described several parts of the legislation passed in the 1992 session.

The new law allows businesses to get a premium credit if they conduct certified safety programs, which is a small step toward cutting costs, said Kasten.

There are also new requirements for posting information about workers' compensation that advise employees they must report injuries in certain timeframes, gives the name and address of the insurance company, and the toll free number of the Division of Workers' Compensation.

Under a section on fraud, the new law makes it unlawful to file false claims and makes it a crime for employers not to have adequate insurance.

The law also gives employers the right to pay loss time benefits until the insurance company starts paying; however, the employee must agree in writing to pay it back when insurance benefits start coming in.

Another big part of the law allows for having deductibles as a way of reducing insurance costs; however, the law prohibits the cost of the deductible from being passed on to employees.

The new law also sets up deadlines for reporting injuries to insurance companies and other guidelines to assist in prompt filing and settling of claims.

A workers' compensation advisory committee has also been formed to review the present laws and make a recommendation for changes that can be made in the 1993 legislative session.

"The law passed this year is a good start," said Knowlan.

Knowlan and Kasten stressed the importance of encouraging employees to report accidents right away. This makes it easier to settle claims and determine causes of the injury.

Although premiums have risen dramatically in recent years, Knowlan explained there are some advantages to workers' compensation.

He said that employees covered by workers' compensation cannot sue employers in circuit court for damages incurred while working. "This (workers' compensation) is their exclusive remedy," said Knowlan.