Articles by Insurance Recovery Group Managers and Partners

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Second Injury Funds in Flux; Opportunities, Changes, and Questions

By W. Frederick Uehlein and Mark Nevils

As policymakers throughout the country grapple with exploding medical costs and the severity of long-term indemnity costs in workers compensation claims, they look to find other ways to lower employer costs so that employers can remain competitive. Debate about cost reduction in many states has focused on the abolition of second injury funds (SIFs) and whether elimination of such funds will help solve the cost problem. Given the complexity of cost reduction, SIFs can appear to be easy targets for savings. But is the bark here worse than the bite? In recent years, New York, South Carolina, and Georgia have enacted legislation to phase out their respective SIFs. Over 20 second injury funds have closed or “sunset,” leaving about 20 states with SIFs open to claims with new dates of injury. Of these, about 10 have enabling language that creates significant opportunities for employer savings. [more]

Reprinted by permission from The Journal of Workers Compensation, Spring 2008

Found Money: the Benefits of an Aggressive Approach to Second Injury Fund Recovery

By David A. Jollin, Dorothy M. Linsner, and W. Frederick Uehlein

The benefits of a comprehensive workers' compensation second injury fund recovery program are many. For the insured employer, recovery puts "money in their pockets" if there are deductibles or retentions or helps to reduce experience modification factors; for self-insured employers and insurers, dollars are recouped, loss costs are lowered and reserves are reduced. Because of the high recovery value of many claims, even a modest increase in the number of recovered claims can have a substantial positive impact. Second injury funds are there for the purpose of reimbursing eligible insurers and employers. Employers that don't ask for this money won't get it, but they will continue to finance the fund regardless, paying for others to get paid. Reimbursement is not guaranteed until it is negotiated, awarded and collected in a timely manner. [more]

Reprinted by permission from the National Association of Subrogation Professionals, Subrogator Winter 2006

Leaving money on the table: obstacles to second-injury fund recovery

David A. Jollin and W. Frederick Uehlein

One area of workers' compensation loss management that is all too often given short shrift by employers, insurers, and TPAs alike is second-injury fund recovery. Second-injury funds are one of the more esoteric niches in workers' compensation. Consequently, many employers and front-line claims staff either don’t understand the opportunities or simply aren’t trained to look for them on a day-to-day basis. In addition, claims staff and risk managers are often overworked and have competing priorities, or they may underestimate the potential.[more]

Reprinted by permission from Public Risk January 2006

California Workers' Compensation Permanency Reform: Providing the Tools for Cost Containment

By Mark J. Nevils

The 2004 amendment to the California Workers' Compensation Law (SB 899) has several ambiguous substantive and procedural changes, some of which are already under judicial review, with more to come. Even with these outstanding questions, the new law contains statutes with clear and valuable cost-containment tools that became effective on April 19, 2004, the date of enactment. Carriers and employers must learn how to use these new cost-containment tools as soon as possible to create the savings that the law intended. [More]

Reprinted by permission from Claims Quarterly, March 2005.

Closing the Recovery Gap

By W. Frederick Uehlein and David Jollin

Does any company know for sure if it is maximizing opportunities to reduce total workers' compensation costs through third-party recoveries? How many claims managers, risk managers, or CFOs are confident that they are maximizing recovery dollars for their company? Frequently, the recovery mantra is, "How am I going to fix this? Will it take months?" As we travel around the country talking with insurance professionals, we have rarely heard positive responses to our questions about maximizing recovery. We more often hear one of two refrains, "We've got it covered" or, "We will try to get to this issue later." Judging by what we have heard in interviews with employers and insurers alike, the answer to the question of how long it will take to fix could be "Years." [More]

Reprinted by permission from The Journal of Workers' Compensation Winter 2005.

Second-Injury Funds: Still a Valuable Cost-Containment Tool

By Mark J. Nevils

The debate continues on whether workers' compensation second-injury funds (SIF) fulfill their intended purposes. The fact remains, however, that these funds still exist in many jurisdictions, and provide employer/carriers with a very valuable cost-containment tool when properly handled. As the workers' compensation claims process becomes increasingly segmented, more companies are dedicating personnel to in-house programs or outsourced vendors to achieve cost containment. An estimated $800 million is paid out annually from these funds across the country, primarily by either reimbursement to the carrier of directly to the claimant. [More]

Reprinted by permission from Claims Quarterly, March 2004.

Second Injury Funds: Maximizing Your Recovery Results

By W. Frederick Uehlein and Dorothy M. Linsner

Workers' compensation claims management has entered a new era. Rapid technological advances in computer software enable claims managers to track information, people, and statistics, and to learn from them as never before. This development provides an unparalleled opportunity for cost savings at a time when costs are rapidly escalating. Sophisticated computer claims-management systems allow claims managers to unbundle, measure, and reengineer various services, targeting the most efficient solution at the lowest cost. The same openness to change that has already been witnessed in other areas of the workers' compensation industry needs to be carried over to the second-injury-fund recovery process. [More]

Reprinted by permission from The Journal of Workers' Compensation, Fall 2003.

Revealing Circumstances

This article by Barbara Bowers in the June 2003 issue of Best's Report discusses claims litigation software that lowers total costs by streamlining the process and making it more transparent to insurers and lawyers. It includes a sidebar by Fred Uehlein entitled "In Search of Savings." [More]

Reprinted by permission from Best's Review June 2003.

Subrogation: Thar's Gold in Them Thar Claim Files

By R. Gary Lee

Subrogation is often a missed opportunity in workers' compensation claims files. The average amount of lost recovery dollars approximates one point on many insurers' combined ratios. For the insured, the result can be unnecessary premium increases along with a poor experience modifier. Specialized subrogation efforts can yield an attractive return on investment (ROI). I will detail the scope of the problem and provide specific steps for the insured, self-insured, or insurer to take to maximize recovery from workers' compensation claims. [More]

Reprinted by permission from The Journal of Workers' Compensation Spring 2003.

The Growing Storm: The Role of Second Injury Funds in the Wake of the ADA

By Dorothy M. Linsner

A worker enters the personnel office of a manufacturing operation to apply for a position. Although he arrives with skills that qualify him for the job, he has had back surgery and is left with an ache that occasionally flares up. From the employer's perspective, this employee represents a potentially expensive commitment. Historically, and employer might have rejected such an impaired worker. Accommodations would have been costly and the risk of injury greater. [More]

Reprinted by permission from MSL Law Review, Fall 1997.