| Workers' Compensation
Insurance Adjuster
What is (are)...
- the role of the
Division of Workers’ Compensation?
The Colorado Division of Workers’ Compensation
along with its Director is charged with administering and enforcing
the workers’ compensation law in this state. In its legislative
declaration, the Colorado General Assembly expressed its intent and
vision for a system that would assure the quick and efficient
delivery of disability and medical benefits to injured workers at a
reasonable cost to employers, without the necessity of litigation.
In order to manage and direct an administrative
system, the Division of Workers’ Compensation is in place to
establish and oversee rules, programs and behaviors to minimize the
occurrence of workplace accidents and provide access to information
and remedies for employers and employees alike.
Included in the duties of the Director is the
adoption of administrative rules or procedures that
implement the statute (law) and
specifically define what is required in order to be in compliance
with that law. For example, the law allows for termination
of temporary disability (wage replacement) benefits when an
individual fails to return to work after receiving both a release
from the doctor to return to work at modified duty and a written
offer of employment from the employer. The rules serve to clarify
that the written offer must either be delivered to the injured
worker or sent by certified mail and further requires that the offer
set forth the duties, wages, and hours of the employment and contain
a statement from the treating physician that the employment is
within the injured worker’s physical restrictions. A copy of
the written inquiry to the treating physician must be provided to
the claimant by the insurer at the time the authorized treating
physician is asked to provide a statement on the claimant's capacity
to perform the modified duty.
In short: the statute tells you what you can do
and the rules tell you how.
The Workers’ Compensation Rules of Procedure
are adopted by the Director in strict accordance with the
Administrative Procedures Act which requires the public be
notified of any proposed changes and be provided a forum for input.
In addition, this state office is charged with
establishing a fee schedule (maximum fees allowable) for medical
providers treating injured workers in the state; the creation and
update of medical treatment guidelines which address appropriate and
reasonable medical care for the high frequency and high cost work
related injuries and diseases; and an accreditation system to
provide physicians with an understanding of the administrative,
legal, and medical requirements of the Colorado workers’
compensation system.
Questions on Division services may be directed to the Customer Service Unit at
(303) 318-8700 in the Denver metro area, or toll free, at (888) 390-7936.
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- an independent
contractor?
A person hired to perform services for pay is presumed by law to be an employee
unless they meet the definition of an independent contractor or qualify under a
specific exemption provided by workers’ compensation laws. A person who works as
an independent contractor and can prove that the person meets the legal
definition of independent contractor is not an employee and is not entitled to
workers’ compensation benefits unless the person buys a separate policy.
If a business hires an individual as an independent contractor, the
independent contractor must be:
- Free from the business’ control and direction over how the
service is performed; and
- Customarily engaged in an independent trade, occupation,
profession, or business related to the service being performed.
These are the two key principles of independent contracting.
A written contract may be helpful in proving independent
contractor status and is always helpful in defining the work
relationship. However, the actual facts of the work relationship are
the most important evidence. If the actual facts differ from what
the written contract says, the facts will control. A list of
important criteria about written contracts is provided in the
section:
What is...the value of written
contracts with independent contractors?
It is important to remember that if a contractor is hired who has
employees, the business must verify that the contractor has workers’
compensation insurance for those employees. A business may verify
insurance coverage by requesting a certificate of insurance from the
contractor’s insurance company. Notification of any policy changes
may also be requested of the insurer. If the contractor does not
have workers’ compensation insurance for its employees throughout
the duration of the work being done for the business, the business
that hired the contractor can be held responsible for the workers’
compensation insurance for the contractor’s employees. If the
business provides coverage for the contractor’s employees because
the contractor failed to do so, the business can recover the cost of
the premium from the contractor.
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- an admission of
liability?
An Admission of Liability is a statement by an insurance
company acknowledging responsibility for payment of benefits
outlined in the admission. Once an admission of liability is
issued, an insurance company is bound to pay the benefits set forth
in the admission until it can terminate benefits under the law.
If you would like to review average weekly wage calculations or the
criteria for terminating benefits, see the
Average Weekly Wage Desk Aid or
What is...the
criteria for terminating benefits?. In the alternative,
you may contact the
Division of Workers’ Compensation and ask to speak with a Claims
Manager.
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A Notice of Contest is a statement by an insurance company
denying responsibility for payment of benefits. The basis for the
denial is outlined in the notice of contest. If the reason for the
denial is further investigation, the adjuster should perform
timely follow-up to determine whether a claim falls within the
purview of this statute and should be admitted and paid, or fully
denied.
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Prosecuting a claim means to follow through with actions to
obtain benefits until a final determination is made. Prosecution of
a claim may include requesting a hearing, participating in a
prehearing conference for the purpose of resolving issues, engaging
in good faith settlement negotiations, obtaining medical evaluations
and reports necessary to prove the case, etc. Under the Colorado
Workers’ Compensation Act, timeliness of prosecution is also a
factor. Failure to take action to prosecute a claim for a period of
6 months will be considered failure to prosecute and may result in
the closure of a claim.
See
C.R.S.
8-43-207(1)(n).
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An order is a written decision by an Administrative Law Judge or
the Director of the Division of Workers’ Compensation that awards or
denies benefits, imposes penalties, or directs the parties to take
certain actions, such as close a claim, or respond to a request for
information. An order will address a specific issue or issues which
one or both parties have brought forward to be reviewed and
decided. Certain orders, (those which award or deny benefits or
impose penalties) may be appealed. If you disagree with an order
that awards or denies benefits and wish to appeal, be sure to follow
the instructions on the order and file your appeal (called a
Petition to Review) exactly as described.
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- temporary disability
benefits?
Individuals who lose more than three days or three shifts of work
as the result of a work related injury or disease may be eligible to
receive a form of wage replacement beginning on the forth day of
work loss. This benefit is called temporary disability. Once
started, temporary benefits must be paid every two weeks until
terminated in accordance with the law. There are two types of
temporary disability benefits:
- temporary total disability?
Temporary total disability is a benefit that is available when an
individual has been off work for more than three days or three
shifts as the result of the injury. The benefit rate is based on
two-thirds of the worker’s average weekly wage at the time of injury
up to a maximum established by law. The initial three days of work
loss are not payable as compensation unless the injured worker is
off for more than two weeks.
- temporary partial disability?
Temporary partial disability is a benefit that is available for partial wage
loss when an individual has returned to work at less than full wages. Benefits
are calculated at two-thirds of the difference between the worker’s
average weekly wage at the time of injury and his/her current earnings.
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- the criteria for
terminating temporary disability benefits?
Temporary disability benefits will terminate when:
- The claimant returns to work at your pre-injury wage
- The claimant is given a release to return to regular work by
your authorized treating doctor
- The claimant is given written release by the authorized
treating doctor to return to modified work, the employer makes a
written offer of such work, and the claimant fails or refuses to begin the
work*
- The claimant fails to appear at a rescheduled medical appointment
following notification that such failure will result in
suspension of temporary disability benefits.
- The authorized treating doctor determines the claimant has
reached maximum medical improvement (MMI). MMI means that
the injury or disease causing the disability has become stable and
no further medical treatment will improve the condition
*If the claimant works for a temporary help
contracting firm, a business which hires people to work for a third
party, s/he is entitled to receive only one written offer of
modified work. Any future offers do not have to be in writing.
The offer of work must be approved by the doctor. The claimant
is allowed at least twenty-four hours, not including Saturday,
Sunday, or a legal holiday, to respond to the offer of work.
If the claimant does not accept the offer of work, his/her benefits may stop.
Temporary disability benefits may also be terminated by a
petition. See
What is...a Petition
to Modify, Terminate or Suspend?
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An insurance company may request permission to modify, terminate or
suspend temporary disability benefits for reasons which fall outside of
the standard criteria (see
What is...the
criteria for terminating temporary total disability benefits?)
by filing a petition or request to terminate benefits with the
Director of the Division of Workers’ Compensation and stating the
basis for the request. The form must be simultaneously filed
with the injured worker and his or her attorney along with a
response form. If the injured worker fails to object in
writing within 20 days of the date of the petition, the request may be granted and
benefits may be modified or
terminated. If a timely objection is received, the insurance company
must then set the matter for hearing before an administrative law judge
or wait until benefits may be terminated under the standard criteria set
by statute. See Rule
6,
Suspension,
Modification or Termination of Temporary Disability Benefits by a
Petition.
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- maximum medical
improvement (MMI)?
“Maximum medical improvement" means a point in time when a physical or mental
injury has become stable and when no further treatment is reasonably expected to
improve the condition. The possibility that the condition may get better or
worse over time or the fact that a person is receiving medical maintenance
treatment does not affect a determination that s/he has reached maximum medical
improvement.
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- permanent partial
disability?
Permanent partial disability means a permanent loss of function
(or impairment) to a body part or a body system (i.e. nervous
system, respiratory system, digestive system, etc.), that can be
measured in accordance with
The AMA Guide to the Evaluation of
Permanent Impairment (Third Ed. Rev.) and which directly
resulted from the injury or occupational disease. A physician
trained (accredited) in evaluating impairment determines the amount
of permanent impairment that has resulted from the injury or disease
and assigns a number in the form of a percentage.
There are two types of permanent partial disability awards under
the Colorado Workers’ Compensation Act.
- Scheduled Injuries: Permanent impairments to arms,
legs, hands, feet, fingers, toes as well as vision and hearing
are called “scheduled injuries” because these injuries are
compensated based on a schedule. The schedule can be found at
C.R.S.
8-42-107 (2) and assigns a value to each of these
body parts. The value is expressed in weeks. For
example, the little finger of the hand is assigned a value of 9
weeks. To determine the amount of an award to the little
finger, 9 weeks will be multiplied by the percentage of
impairment (or loss of function) the physician determines has
resulted from the injury. This amount is then multiplied
by the compensation rate in effect at the time of the injury.
For example, if the physician determines the claimant suffered a
50% permanent impairment to his/her little finger, 50% of 9 weeks
equals 4 ½ weeks. If the injury occurred between July 1, 2003
and June 30, 2004, when the weekly compensation rate for
scheduled injuries was $207.35, then the award would be
calculated in the following manner:
$207.35 x 4.5 weeks =
$933.08
In another example, the physician
has determined that as the result of an injury to the foot, a 10% permanent impairment to the whole foot
has been sustained. The
injury occurred in August, 2004 when the compensation rate for
scheduled injuries was $212.32 per week. The value of a foot
below the ankle on the schedule is 104 weeks. Since impairment
of the foot was rated at 10%, then 104 x 10% = 10.4 weeks and
the permanent partial disability award is calculated as follows:
$212.32 x 10.4 weeks = $2208.13
- Non-Scheduled Injuries: Permanent impairment to parts of the body or body
systems that are not listed on the schedule are called “non-scheduled
injuries.” These include such areas as the spine, brain, lungs and mental
function. The method for calculating awards for non-scheduled injuries can be
found at C.R.S.
8-42-107 (8) (d). Non-scheduled awards are determined by
multiplying the following four factors: 1) the medical impairment rating
assigned by the physician, 2) an age factor which takes into account the injured
worker’s age on the date of maximum medical improvement (see chart at
C.R.S.
8-42-107 (8) (e), 3) a fixed factor of 400 weeks, and 4) the temporary total
disability rate.
For example, in a back injury claim, the physician has
assigned 10% impairment as the result of a work related injury.
The injured worker (claimant) is fifty years old and his
temporary total disability rate is $200.00 per week. The award
would be calculated as follows:
10% x 1.20 (age factor for 50 years) x 400 (weeks) x $200 =
$9600.00
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- permanent total
disability
Permanent total disability means the employee is unable to earn any wages in the
same or other employment. Like temporary total disability, these benefits are
based on two-thirds of the average weekly wage in effect at the time of injury.
Unlike temporary disability benefits, permanent total disability is paid for the
lifetime of the injured worker (except for injuries occurring between July 1,
1991, and July 1, 1994.)
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