Can you explain how Worker’s Compensation offsets due to Lump Sum Settlements are determined?
Sure. As most of you know, Workers’ Compensation is always included in most ERISA Group Plans as an offset to benefits. The WC system has progressed to a process where it is often necessary to go to court in order to recover. However, parties to WC actions now prefer lump sum settlements, which are also offsets to disability benefits
Insurance companies typically amortize WC settlements over the life of the claim, mainly because they are significant. In some instances insurers will reduce benefits to $0 until the total cost of the settlement is recaptured. Shorter periods are often coded when the full settlement is taken in two or three years.
Claimants should keep in mind that attorney’s fees and reimbursement for future health care needs is not included in the amortized amount.(“Amortization”, by the way, means allocation of a fixed monthly offset over time.) Claimants may have a say in how the offset is allocated if they make a specific request right away. This isn’t an issue you can sit on for a while and expect the insurance company to change to what you want. Claimants will need to send in a copy of their WC settlement agreements so that the offset can be calculated.
What’s with the Guardian’s push for short deadlines.
I’ve noticed this for sometime as well. Once Guardian receives notice of claim, it sends out repetitive notices looking for the claim with short deadlines, which are “out of Plan or contract.” I confirmed with several claims handlers that these are “administrative deadlines” to make Guardian’s life easier and, of course, claims can’t be denied if applications aren’t received on queue. Nevertheless, the deadlines given by Guardian are out of Plan or contract, and insureds shouldn’t get stressed out when letters demand claims be submitted at at certain times. Nothing is going to happen if you need more time, the company just likes to scare you into submission.
Guardian is also processing Group Plans, which is different for the traditional IDI only company. It doesn’t seem to know what to do quite yet, and I’ve noticed a cross-over with IDI and ERISA investigations.Let’s hope Guardian improves on the ERISA investigations and figures it out.
