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Show r? Page 10 24- Hi ; t j - Hew Coverage? The Utah State Insurance Department is investigating the marketing of an insurance plan proposed by agents and others that is intended to replace the coverage provided by a workers compensation insurance policy. Employers are attracted to this new plan because it is believed to be less expensive and touted to provide coverage around the clock and not just at work. Because ofthe around the clock coverage it is being referred to as 24 Hour Coverage." Currently the law requires employers to provide workers compensation coverage for their employees. The replacing of workers compensation coverage with the 24 Hour Coverage may be possible through what could be considered a loophole in the law. The loophole" allows employers to file an exemption of officers and directors from workers compensation coverage with ' a workers compensation insur- rate officers. This done, the employer will then require his employees to sign the necessary form exempting them from the requirement of being covered under a workers compensation policy. At this point the agent then sells the employer a set of policies making up the 24 Hour Coverage plan to replace the workers compensation policy. Now, in place of a single workers compensation policy, the employer has substituted a life policy, a health policy, a disability income policy, and a shortterm disability policy. At this point it appears that small employers with traditionally high workers compensation rates are the ones being targeted for this coverage. Most of these employers are construction subcontractors like roofers, framers, concrete workers, etc. The agent pitching the 24 Hour Coverage to the employer emphasizes the low premiums and coverance company. age that protects employees on The scenario would run like and off the job. this. The insurance agent sugThe test of these assertions to comes when one of these new dihe the that gests employer change the status of his employ- rectors or "officers" has a claim ees to that of directors or corpo that would have normally been GOOD LUCK AND HAPPY RETIREMENT On July 1, 1947, Maurice and Gwendolyn Chapman first Chapman Furniture. For the next 47 plus years the twosome served our community and those around us. Maurice and Gwen have been a landmark on Nephis main street since that time. There was always a cheerful greeting when you entered the doors of Chapman furniture, and one would be hard pressed to find a home or business in the area that the Chapmans have not either laid carpet, Linolium, or sold some furniture of some kind. Anything that was asked of them they would give 100 plus. Many a friend was extended credit thru the store with little more than a hand shake. The two were actively involved in the Kiwanis Club, along with church and civic affairs. Maurice passed away in December 1996 and since that time Gwen has ran the store by herself. This past week, the Gwen has sold their store. Mr. and Mrs. Maurice Chapman we salute you, and thank you for the many years of dedication and service that you have given your friends and neighbors in this and the surrounding communities. Today, the moving van will be taking Gwen to Payson to her new home. We hope that she can get a well deserved rest. Your Nephi Friends opened the doors Wednesday, August 6, 1997 Nephi, Utah tElj when they bill their patients. ting a felony. This charge could pensation policy. Under the 24 Unless their contract with the be made against the employer Horn: Coverage plan the follow- health care provider requires who, on paper only, changes the ing issues commonly surface that the provider follow the status of his employees to direcemphasizing the difference be- workers compensation fee sched- tors in order to opt out of the tween it and a workers compen- ule, the employee may be re- requirement to carry workers sation policy. quired to pay the difference when compensation insurance. CrimiThe 24 Hour Coverage re- a provider bills more than the nal action taken against the emquires that the insured wait as insurance company pays. ployer could result in either a 0 much as The 24 Hour Coverage occa- fine or the business being shut days before becoming eligible to receive a dis- sionally has language in one of down. An agent selling this type of ability claim payment. Even then the policies in the plan that conthe coverage may or may not flicts with the benefits promised insurance, who by omission or reach back to the date ofthe in- by the agent. For example, it is otherwise contributes to the falpolicies to sification of forms, can be jury. A workers compensation common for policy requires a waiting period exclude coverage for claims that charged criminally or be includof three days and then covers the occur while the director is on ed in a liability suite brought disability costs from the date of the job because such claims are against the employer. When asked if any employees injury, provided the disability typically covered by workers lasts more than fourteen days. compensation policies. This be- covered under a 24 Hour CoverAll medical costs are paid imme- comes a serious problem where age plan were being investigatthe policy language has ed for criminal activity, Gale diately at 100. The 24 Hour Coverage claim not been properly coordinated Lemmon of the Utah Insurance payment may be reduced as a and changed. Department said that they were Aside from these claim relat- not. In fact, he said, Vhere result of other disability income ed problems, there are legal is- these plans are concerned, emsources. A workers compensation policy pays the same amount sues that directly affect agents ployees sometimes are threatregardless of other disability selling this plan and employers ened with the loss of their job if The 24 Hour Coverage usu- who purchase it they do not agree to go along. Employers who purchase the This, along with the fact that ally will not pay for any permanent disability once an insured 24 Hour Coverage are not pro- they are the ones who suffer has recovered from an injury. tected against suits brought by when claim payments are withWorkers compensation policies injured directors and officers. held or denied, makes employees Those covered by workers com- the victims. pay for permanent disability, The 24 Hour Coverage re- pensation policies are protected It should be emphasized that the policies that make up the 24 quires that a deductible and co- from such suits. There is a distinct possibility Hour Coverage plans are legitipayment be paid. Workers comthat an employer who is not ad- mate. It is the way the employer pensation does not. The 24 Hour Coverage does equately informed may inadvert- obtains an exemption from worknot have a set fee schedule that ently file false information with ers compensation coverage for medical providers must follow a state agency thereby commit his employees that is not covered by their workers 60-9- ur 24-ho- ur i the 24 Hour Coverage plans to save themselves money may find that the money they saved is eat- - en away by fees. Employers nor- mally are charged by the insur-anc- e agent an up fixnt fee just to hear about the plan and then additional consulting fees to put the plan into effect. Because of the proliferation of these plans in Utah, the Insur- -' ance Department has both its Compliance and Enforcement Division and Fraud Division in- - state dealing with this issue. The State of Oregon recently passed legislation that tightens up which allow rank and file employees to be listed as di-- ; day. The goal was to reduce costs and maintain the same level of ; coverage. Their efforts have so ; far been unsuccessful. For now, small employers should be cau- tious with insurance plans that offer them a way out of the work-er-s compensation legal require- ments. If it involves omissions, dishonesty, or the filing of false information and, at the same , time, even a fee to discuss it, DONT. The price is too high. - 96SO' Monday through Friday See The IMTERHAL ESDICreg Michael Peterson, MD MD Mark Oveson, MD For Rubber Todd Plumb, MD Grant Rasmussen, MD James Tatton, MD 346 East 600 North I ricph! 623-0775- 1' 4 GlfflhUlWi too otit Yfil' ilWiMhhU lit II vio.itiH 'luui nfiLmur ! mm 'Tjmr.irn m 'Miimijiib (J t . ft' llfll)ifft " ) "l.e'V tftlsni U'iv nf- - tnnu t . o . tn Of Us- t (i Ct'vT.'n i Ii i iliifjifljtjitflit 'i llfr ft - Ilf it) - , sUomi f Hu) .. titi) lit! e t . '! Iillt J. nyi I) f )Ui m)( i Jjtflfi), . 4 ,,tftt III ,, - If, ft tX - tJ,t, - r . () j In the past the insurance in-- 1 dustry and regulators have looked at alternatives to workers ' compensation as it is known to--' EXTENDED CLINIC HOURS 9:00 a.rn. to 12:00 p.m. 2:00 p.m. to 7:00 p.m. James Besendorfer, ; rectors or officers. - we care! FAMILY PRACTICE ' reg-ulatio- ns rjophl nodical Clinic Count on us . vestigating those marketing them. It might be of interest to know that Utah is not the only of as js i!l Small employers who purchase com- 24-ho- f T"T - vm:: 1I VVinr |