Wednesday, April 15, 2009

Why Timeliness of Payment matters in Workers' Compensation

Timeliness of payment matters. Injured workers and their families have financial commitments for mortgages, tuition, groceries, car payments, and the myriad of expenses we all carry. According to one source, 55 per cent of Canadian workers always or usually live paycheque to paycheque just to make ends meet. Since most families live with small cash reserves, breaks in income continuity due to a work-related injury or illness only add pressure at a time when the injured worker should be focused on recovery.

Recently, the New York Times ran a series of stories on workers’ compensation in the US. One sidebar showed the percentage of claims receiving first payment within 21 days of injury 2004-5. At the ‘best performance’ end of the scale were jurisdictions like Massachusetts, Wisconsin and Texas where about half the claims received first payment within 21 days of injury.

The closest similar statistic for Canada is provided by the Association of Workers’ Compensation Boards of Canada (AWCBC). The timeliness standard is expressed as the ‘Average Calendar Days from Injury to First Payment issued’. While not a perfect parallel to the data quoted in the NY Times, Alberta, BC, and Saskatchewan report averages between 20 and 23 days for 2007.

WorkSafeBC has a target of 17 days average time from injury to first payment issuance. Its current performance is a little higher than that. Put another way, more than half WorkSafeBC’s cases entitled to wage loss benefits are getting their first payments within 17 days of injury.

Several jurisdictions have taken steps to make certain there are no breaks in earnings for injured workers. In BC, many employers (accounting for more than 20% of first payments) continue wage or salary to the injured worker and WorkSafeBC reimburses the employer to the benefit level the worker would be entitled to. In some Australian jurisdictions, employers are responsible for the first week (or two) of benefit before the insurance kicks in.

The point is simply this: timeliness matters. Workers’ compensation involves making tough decisions and tough decisions take time to investigate and consider; knowing that most workers can’t wait more than one pay cycle underscores the need for a ‘sense of urgency’ in the design and administration of workers’ compensation systems.

No comments: