New Workers Compensation Guidelines – How they affect insurers’ response to claims

Key Points

• New Guidelines for responding to an initial notification of injury commenced on 1 August 2016.

• Changes to “reasonable excuse” criteria.

• Intention not to claim weekly compensation can be a reasonable excuse.

The way in which insurers respond to new claims plays a crucial role in best managing workers insurance claims. The introduction of the Guidelines for Claiming Workers Compensation (the 2016 guidelines) effective as of 1 August 2016 has resulted in a change to insurers initial responses to claims, in particular with respect to reasonably excusing a claim. It is timely to revisit when it is appropriate to apply a reasonable excuse.

Responsiveness to an initial notification of injury is the first important step in best management of an injured workers return to gainful employment.

Once an insurer receives notification of a claim, it must respond in one of three ways:

1. Determine liability by either accepting or disputing the claim
2. Start provisional liability payments within 7 days;
3. or applying a reasonable excuse where appropriate.

When is a reasonable excuse appropriate?

The best response to a claim is being able to determine it as soon as possible. However this is not always practicable.

The 2016 Guidelines set out the steps an insurer must take when notified of a workplace injury. It provides guidance as to the basic information which must be provided to the insurer to enable it to determine the claim. Where it is lacking, the insurer can either provisionally accept liability, or apply a reasonable excuse for not commencing provisional payments.

Under the previous guidelines, an “injury that is not a significant injury” constituted a reasonable excuse. This is no longer the case.  Insurers cannot rely on the fact that an injury is not significant to delay provisional payments.

The 2016 Guidelines describes when it is not appropriate to accept liability, provisionally or otherwise by identifying what constitutes a “reasonable excuse”. This will apply when :

• There is insufficient medical information
• The injured person is unlikely to be considered a worker
• The insurer is unable to contact the worker
• The worker refuses access to information
• The injury is not work related
• There is no weekly payments claim anticipated (this appears to replace the previous indicator that the injury was not a significant one)
• The injury is notified more than two months after the date of injury

In the case where an insurer considers a reasonable excuse applies, there are defined procedural steps which must be followed. Some of the requirements remain the same. For example, the insurer must give the worker written notice within seven days of receiving the initial notification and tell the employer in writing as soon as possible. Further, the notice to the worker must clearly state what the insurer’s excuse is, identifying all relevant information relating to the decision. The notice should also state that the worker can still make a claim for compensation.

In addition to the above requirements, an insurer must supply a claim form to the worker and explain how the excuse can be resolved. Further, the insurer must ensure that the worker is aware that he or she can seek further information from the insurer, seek help from their union and that the worker has a right to seek an expedited assessment by application to the Registrar of the Workers Compensation Commission.

However, insurers will need to be mindful that it is no longer appropriate to reasonably excuse a claim solely on the basis that an injury is not ‘significant’. Instead, if there is an indication there will be no claim for weekly payments, a reasonable excuse can be applied.

Tips:

Whenever you apply a reasonable excuse as above:

1. Make sure the notice complies with the requirements of the Guideline
2. Specify a time within which the worker should respond and provide the requested information to redress the identified deficiency
3. Diarise that date, so you can follow up the response
4. Never simply fail to action because the worker has not responded within that time – this can result in weekly payments being payable in the future.

Remember – s11A can be a defence to a claim, but is not a ground for reasonable excuse.

Post by Justine Aubin and Najeh Marhaba