Employers Seek New Solutions To Workers Comp

Sarasota, FL (WorkersCompensation.com) - As the employee health model continues to evolve, employers are finding a need to provide a consistent health care experience and that could mean the lines between group health care and workers compensation continue to blur.

Frank Neuhauser, a senior research associate at UC Berkeley’s Institute for the Study of Social Issues, said employers need to find a model that provides both quality care and consistency for their employees regardless of whether the need for treatment arises from a work injury or an injury at home.

Traditionally, employers and their employees have been required to deal with two separate systems to obtain employee medical care. Non-occupational medical conditions have been treated through group health plans, while occupational injuries and illnesses have been treated through the workers’ compensation system.

But with integrated health care, the same individual physician or medical group sees the employee for both occupational and non-occupational conditions.

Neuhauser argues that integration and blurred lines now can also save money.

“The organizational costs associated with administering one dollar of medical treatment under workers comp is estimated to be $1.25. But to administer this same level of service under a group health plan costs just 14 cents,’’ according to Neuhauser. 

And some companies are now seriously looking at the feasibility of integration.

“Magnacare has seen an interest from both employers and health plans for a total product combining health, workers’ comp and disability,’’ said Steve Kokulak, president of casualty services at Magnacare, which operates PPO networks for health plans, self-funded plans, unions and municipalities in New Jersey and New York.

Kokulak said that integration can also improve the quality of care through better coordination of care and broader access to treatment. The form and extent of integration determine the degree of improvement in quality of care and the level of cost savings.

Experts argue that the main barrier to offering the integration is the patchwork of state laws that in many places prevent the use of narrow provider networks. And many states regulate whether carriers and employers can offer direct care for injured workers and have mandated workers’ compensation fee schedules.

Neuhauser also contends that the current system does not efficiently address the issues that employers and employees face today. In 1915, the system was created primarily to support a heavily industrialized workforce. But that no longer exits. 

One of the biggest impediments to the type of integrated insurance some employers are seeking is a matter of bringing a product to the market and making sure it’s compliant with a state’s workers’ compensation rules. It might be possible to move this piece of the group market in Texas, which allows employers opt out of a state-workers’ compensation program, as well as other states that allow dispute resolutions with unions as an alternative to state workers’  compensation programs, according to Kokulak.

 “Plans are now more employee-centric, and we made that shift five years ago,’’ Kokulak said.

Industry watchers contend that more employers will want to have their workers’ comp, health and disability insurance benefits more integrated. And the new expanded availability of health insurance could ultimately shift payments for injuries and illness that would otherwise be covered by workers’ comp to health plans

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