When they happen on the job, workers have the right to file for workers’ compensation — which helps them with expenses relating to any injuries. What happens if you’re not responsible? What if a 3rd party crashes into your employee? What if your employee slips-and-falls on a property that you don’t own? When a 3rd party is responsible for a workplace injury, your business can file for subrogation.
If you qualify, the subrogation claim may reduce your premiums! Many businesses fail to take the appropriate steps to ensure that their subrogation claim goes through.
Here’s how your Ohio business can navigate the complexities of workers’ compensation laws and land a subrogation claim.
What is Subrogation?
Subrogation prevents employees from double-dipping benefits. So, let’s say you have an employee that was injured in an auto accident due to a 3rd party. If they were on the clock when the accident occurred, they may qualify for workers’ compensation. If they pursue a lawsuit against the 3rd party or their insurance company, the BWC will put a lien against their winnings and recover some or all of the workers’ compensation benefits.
In other words, subrogation helps employers (and the BWC) mitigate workers’ compensation costs for workplace injuries that were caused by a 3rd party.
3 Types of Subrogation
Any workplace accident that was the result of a 3rd party can qualify for subrogation. But, let’s take a glance at a few of the most common subrogation claims.
- Auto accidents where a 3rd party was at fault
- Slips-and-falls that occur on property that an employer doesn’t own
- Equipment or machinery malfunctions where the employee files a suit against the manufacturer
- Medical malpractice
- Accidents at a construction site caused by a 3rd party (e.g., contractors, sub-contractors, etc.)
- Dog bites and animal attacks
State-Funded vs. Self Insured: The Subrogation Process
The process of a subrogation claim is wildly different for those employers that are state-funded as opposed to those who are self-insured. While businesses unlock a host of benefits by being self-insured, they’re also responsible for handling some of the more intricate nuances of workers’ compensation.
State-Funded Subrogation Process
For state-funded businesses, subrogation is mainly handled by the BWC. Once a BWC specialist, your business, or your attorney makes a referral to the BWC, the case is largely out of your hands.
There are some positives and negatives to this. First, you don’t have to deal with the day-to-day claim processes, but you’ll also be in the dark on the subrogation process as a whole, which may take a few years to be resolved. Also, the BWC makes no guarantees that a successful subrogation will reduce your premiums.
The primary responsibility for businesses during this process is to collect and gather evidence — which can be a complicated process. You might need to discover the insurance company of the 3rd party and, without the right resources, this can prove difficult. TPAs can assist during this process by leveraging a wealth of established connections and resources to gather all of the appropriate documentation.
Self-Insured Subrogation Process
For self-insured businesses, the subrogation process will be more complex. The BWC will not handle the process for you — which makes you responsible for pursuing the subrogation. You’ll need to stay in constant contact with your TPA/PEO during this process — as they will assist you in evidence gathering.
We highly recommend that you immediately get your attorney involved on any subrogation claim — as they will be your primary asset for all subrogation legal matters.
The Role of Your TPA
Does all of this sound complicated? Don’t worry! Your TPA has your back. While your TPA can’t get involved in the legal proceedings due to Ohio third-party laws, they can assist you in critical information and evidence gathering. They’ll help you establish the workflows to support a wide variety of workers’ compensation needs, including subrogation.
Contact your TPA to discover more about the complexities of subrogation. Remember, you’re not alone. With the right TPA, you’ll be in-the-know on all of those subrogation complexities.
Can employers or co-workers be 3rd parties?
- Yes! Employers and co-workers can be 3rd parties depending upon the nature of the lawsuit.
Can you waive subrogation rights?
- In some instances, subrogation can seem like a bad idea. What happens if a worker slips-and-falls on the property of one of your biggest clients? You might be afraid that the subrogation will impact your relationship with them. Unfortunately, if you’re state-funded, you can’t waive subrogation rights. Since subrogation is handled by the BWC, the entire process is out of your hands.
- For self-insured businesses, you should contact your PEO/TPA for more details.
Will a successful subrogation reduce my premiums?
- Maybe. If you’re self-insured, winning a subrogation will certainly mean that you recover costs associated with the injury. But, if you’re state funded, the BWC holds the keys to your premiums. And, according to the BWC “the subrogation collection may also result in a reduction of the employer’s premium. However, the employer’s premium may remain the same because BWC considers many factors and other claims when calculating premiums.”
Does subrogation cover death benefits?
- Yes! Death benefits can be subrogated. So can past, present, and future compensation payments, medical benefits, and rehabilitation costs.
Do subrogation claims get settled?
- Almost always. Like most lawsuits, settling is a normal part of the process. It helps reduce fees and increase net gains for both parties.
Need a Hand?
Whether you’re state-funded or self-insured, Sheakley can help you with your voyage through workers’ compensation complexities. Our state-funded TPAs have a wealth of experience dealing with subrogation processes and our self-insured PEO service will assist you in setting up the necessary workflows to support you with any of your benefits needs.
Schedule your free consultation with a Sheakley TPA professional today! We’re here to help you handle all of your HR needs so that you can focus on what matters most — growing your business.