Resolving Claims and Saving Money
Alternative Dispute Resolution
As a contractor, you are aware that California state law requires every employer to have workers’ compensation insurance in case an employee is injured on the job. In exchange for the premium paid by an employer, the workers’ compensation insurance carrier provides wage replacement and medical benefits to injured employees.
It sounds simple enough, but if you have been on either end of a worker’s compensation claim, you know it is not uncommon for claims to prolong. While the employee waits to receive treatment, the employer realizes increased expenses for every day the claim is open.
Fortunately, in 1994, labor and management collaborated to pass legislation that allowed for a collectively bargained workers’ compensation program to streamline the claims process. Codified under Labor Code 3201.5, this streamlined claims process is known as an Alternative Dispute Resolution (ADR) system (also known as “carve-out”).
ADR provides an alternative to settling work-related injury claims and avoids unnecessary antagonism between employers and employees. If an employee covered by an ADR program suffers a work-related injury or illness, the worker can receive knowledgeable advice from a workers’ compensation expert called an ombudsperson, whose role is to resolve problems in a satisfactory manner as soon as possible. If the dispute is not resolved, the ADR program utilizes mediation and arbitration by former workers’ compensation judges in order to resolve claims in a time and cost efficient manner while discouraging litigation.
By providing professional guidance for injured employees, the ADR programs helps cut legal expenses, reduce the red tape in claims resolutions, improve access to quality medical treatment and prompt compensation, promoting a speedier return after work injuries.
Under the Laborers Group ADR Workers’ Compensation Programs, signatory contractors are eligible for a group premium discount as well as a program premium credit, which can significantly reduce a policy premium. In addition, union contractors utilizing ADR have seen experience modification rates reduced by as much as 35% due to efficient processing and reduced claim expenses.
With all that said, the bottom line is, ADR shortens the claims process and delivers significant benefits to contractors and their employees.
The Southern California District Council of Laborers and Northern California District Council of Laborers, their Local Unions, and signatory contractor associations have established two group ADR workers’ compensation programs in California. These ADR programs have provided signatory contractors millions of dollars of premium savings since their inceptions.
To learn more about a Laborers Group ADR Workers’ Compensation Program please contact the program in your area.