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Are companies being overcharged for workers' comp coverage?

Monday, June 15, 2009 by

It appears that they are and some are receiving compensation in the five figure range, which for many small companies, is a significant payment.

Advanced Insurance Management, a Chicago-based company, helps businesses determine whether they have been overcharged for coverage. They are currently working with the S.C. Small Business Chamber of Commerce to help small businesses there.

Why are companies being overcharged? It’s related to the state’s Second Injury Fund, which was created after World War II to encourage businesses to hire employees who had pre-existing medical conditions resulting from an injury. There are many other similar programs across the country. The goal of the fund was to encourage businesses not to discriminate against the disabled out of fear their workers’ compensation premiums could go up.

Insurance companies providing workers’ compensation are required to pay into the fund, which could be drawn from if an employee suffers a so-called “second injury” while on the job. As part of the premium, the employer would be held harmless and not charged for the accident. Apparently, insurance companies were taking money from the fund and not passing savings on to clients.

“The insurance carrier was reimbursed from the state, and they were supposed to pass on the benefit to the employers. Over 50% of the time, they were not adjusting the modifier rate,” said an executive involved with the program.

The fund is really irrelevant now with the federal Americans with Disabilities Act which was passed in 1990. It established that employers cannot discriminate on the basis of a disability.

If you have questions about Chicago workers compensation law, be sure to contact us. We are qualified attorneys that will fight for your rights. Get a workers comp lawyer in Chicago who knows how to navigate your case.

Howard & Nemoy

111 W. Washington Street, Suite 1023
Chicago, Illinois 60602
Phone: 877-274-2953

Posted at 11:40 AM

Topic: Personal Injury