The ABCs of Workers' Compensation

School business managers and other school officials play an important role in managing school employees injured while on duty. Knowing the ABC’s of workers’ compensation will ensure that your community or district complies with the law and meets the needs of injured employees.

When an employee is injured.
Employees must report any work related injury they sustain to their employer. This can include their immediate supervisor or another school official. Once the employee has reported the injury, the employer must immediately report the injury to its workers’ compensation insurance company, such as MIIA. Reporting a claim is usually as easy as calling an 800 number and providing basic information about the employee and the injury. In most cases, the workers’ compensation insurance company takes over from there.

What will the insurer do?
The insurer will contact the injured employee to ensure that he or she is receiving the medical attention she or he needs. The insurer will work with the treating physician to help return the employee to work as soon as it is practical and medically appropriate. During this time, the insurer may also conduct a prompt and thorough investigation of the accident.

When does Workers’ Compensation become effective?
In Massachusetts, injured employees are eligible to collect lost wages if they are out of work because of their injury for more than five calendar days. These five days do not have to be consecutive and any day that an employee is totally or partially disabled should be counted. If an employee is unable to earn wages for five or more calendar days, the employer must report the situation to their insurer and the Department of Industrial Accidents (DIA) within seven calendar days (not including Sundays or holidays) of the fifth day of disability. (At MIIA, we will report the claim to the DIA for our members.) This is called the “First Report of Injury.” Once the insurer is notified, it must issue payment or notice of denial to the injured employee within fourteen days of receipt of the First Report of Injury.

How much compensation will be paid?
If the insurer approves the claim, the injured employee will receive compensation for his or her lost wages for days he or she is disabled after the first five days. Injured employees are not compensated for the first five days unless they are out for 21 or more days. Injured employees who are totally disabled are eligible to receive 60% of their average weekly wage. Under M.G.L. Chapter 152, S.1, the average weekly wage (which includes overtime) is defined as “the earnings of the injured employee during the period of twelve calendar months immediately preceding the date of the injury, divided by fifty-two.” The employee is also entitled to reasonable and necessary medical care, subject to the insurer’s approval.

Red Flags of Workers’ Compensation Fraud

Fraud and abuse of the workers’ compensation system costs public employers thousands of dollars annually. Insurers take such abuse seriously and have established systems and procedures to detect and prevent fraud, including the use of licensed investigators. Information obtained from school business managers and other school officials often play a significant role in these efforts.

Usually, fraud is defined as an employee who collects benefits illegally, such as receiving workers’ compensation benefits while earning wages or salary at another job. Two sections of the Massachusetts workers’ compensation law are most important in identifying and defeating fraud:

1. M.G.L. Chapter 152, S.11D. This section of the statute states that any employee receiving indemnity benefits shall notify the workers’ compensation insurer of all wages earned, including salary from self-employment. Employees are required to submit this information to the workers’ compensation insurer once every six months. Failure to do so can result in suspension of their workers’ compensation benefits and may result in civil or criminal penalties. This earnings report is a very useful tool in documenting criminal intent if the employee fails to disclose earnings while she or he is collecting workers’ compensation indemnity benefits.

2. M.G.L. Chapter 152, S.14. If any party (employee, employer, insurer, plaintiff or defense counsel, or medical expert witness) conceals or knowingly fails to disclose information or commits perjury, then the party’s conduct must be reported to the Insurance Fraud Bureau.Potential red flags of workers’ compensation fraud.

There are certain indicators or “red flags” that often help identify alleged work related injuries that may merit closer investigation. The presence of one or more indicators may suggest fraud, however it does not mean that fraud has been committed. Note that this list is not intended to be all-inclusive.

• The accident is not reported promptly.
• Details of the accident are vague.
• There are no witnesses to the accident.
• There are discrepancies in the injured worker’s story.
• A tip is received that the injured worker is employed elsewhere.
• The accident occurs in an area where an employee would normally not be working.
• The claim is reported on a Monday.
• The injured worker is a new employee.
• The injured worker is a disgruntled employee or one on the verge of being fired.
• The injured worker is having financial difficulties.
• The injured worker is never home or his/her spouse or relative answers the phone call and indicates that the injured worker will call back in a few minutes.
• The injured worker inquires about a settlement early in the life of the claim.
• The injured worker does not show up for medical appointments.
• A tip is received that the injured worker is employed elsewhere or is engaging in an activity inconsistent with the injury.

Information indicating potential fraud should be reported to your workers’ compensation insurer immediately.