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The truth behind 24-hour coverage.

ENVISIONED BY SOME observers as a sure-fire way to reap savings, the socalled 24-hour care plans are one of the most widely discussed issues on today's benefits scene. In principle, 24-hour plans are designed to reduce the high costs associated with claims administration while eliminating "double dipping"the filing of claims for the same injury under both workers' compensation and employee benefits plans. A 24-hour plan would accomplish this by combining elements of workers' compensation and group health insurance programs to provide coverage to employees both during and after work.

Although the concept of 24--hour coverage has existed for a number of years, the discussion today is centered on the actual merging of workers' compensation and health benefits. "In the past, the idea of 24-hour coverage focused on joint management of both workers' compensation and employee health claims." says Cecily Gallagher, a principal in the San Antonio office of Tillinghast. "Today, however, the talk about 24--hour coverage focuses on any program that provides benefits for both non-occupational medical and disability benefits and workers' compensation in a single plan." Proposals vary. Ms. Gallagher reports that some plans would provide full-time medical benefits to all employees, while limiting indemnity benefits to occupational injuries; others would offer complete benefits for all injuries, but only work-related diseases. Another plan calls for universal coverage designed to provide medical and disability benefits for all illnesses and injuries on an around-the-clock basis.

Today's concept of 24hour plans represents a completely new type of coverage that has yet to be tested on a large scale. "These plans are currently in an embryonic stage: no insurer has yet written a policy for 24-hour coverage," says Larry Kibbee, vice president of the Alliance of American Insurers in Schaumburg, Illinois. In fact, before such plans could be implemented, many states would have to slter their laws and regulations. For example, Ms. Gallagher reports that most state regulations require employers to purchase workers' compensation insurance from property/casualty insurersnot the same firms that provide health and disability plans. If 24-hour plans were implemented, Ms. Gallagher also points out, most states would probably pass their own type of 24-hour plan; multistate employers would then have to wrestle with the regulatory demands of each state in which they have a business presence.

Even though 24-hour coverage has yet to reach fruition, companies can still work toward implementing the operative principles behind it. "A company doesn't need an insurance product to put into practice some of the ideas behind 24-hour care," says Jerry Miccolis, a Towers Perrin vice president in St, Louis. "A company can in effect create their own 24-hour plan by coordinating and group health benefits. A primary way of doing this is to extend managed care techniques into the workers' compensation area,"

So far, only a few states have experimented with actual 24-hour coverage. "After changes in its 1990 workers' compensation law, Florida has been experimenting with 24hour coverage as a pilot program," says Mr. Miccolis. "And since Texas allows its employers to reject workers' compensation coverage, some companies are creating their own in-house programs that operate like the proposed 24-hour plans." Other states are also investigating 24-hour coverage. "At present, California, Oregon, Alaska and North Carolina are looking into it," says Ms. Gallagher. "Also. we've heard that Tennessee is offering nonsubscription for its municipal employees, which would probably result in some experimentation with 24-hour plans."
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Title Annotation:group health and workers' compensation insurance
Author:Christine, Brian
Publication:Risk Management
Date:Sep 1, 1992
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