Workers' Compensation and Claims Management Flashcards

What is the primary purpose of a 'reserve' in a workers' compensation claim?

Answer: To estimate the total projected cost of the claim for financial reporting

Reserves are funds set aside by the insurer or self-insured employer to cover the estimated future costs of an open workers' compensation claim.

Which term describes a workers' compensation claim that is disputed by the employer or insurer?

Answer: Controverted or denied claim

A controverted or denied claim is one where the employer or insurer disputes compensability, causation, or benefits owed.

What is subrogation in the context of workers' compensation?

Answer: The insurer's right to recover money paid from a liable third party

Subrogation allows the workers' compensation insurer to sue a negligent third party to recover benefits already paid to the injured worker.

An injured worker's average weekly wage (AWW) is used to calculate which workers' compensation benefit?

Answer: Indemnity (wage replacement) benefit amount

The AWW, typically based on 13–52 weeks of pre-injury earnings, is the basis for calculating the indemnity benefit amount.

Which workers' compensation classification applies when a worker can perform some but not all pre-injury job duties?

Answer: Temporary partial disability (TPD)

Temporary partial disability (TPD) benefits compensate for wage loss when a worker can perform modified or light duty at reduced earnings.

What is a 'compromise and release' (C&R) settlement in workers' compensation?

Answer: A lump-sum settlement that closes all or part of a claim with finality

A C&R is a full and final settlement where the worker accepts a lump sum in exchange for releasing the employer/insurer from future liability.