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Workers' compensation.

In 1991, workers' compensation cost U.S. employers an estimated $62 billion -- triple the cost in 1980. In Arkansas, premium rates have increased well over 100 percent since 1986.

To identify cost driving factors in workers' compensation, Insurance Commissioner Lee Douglass and the Joint Committee on Workers' Compensation of the Arkansas State Chamber of Commerce and Associated Industries of Arkansas conducted cost studies for Arkansas. The factors identified included: legal disputes within what is supposed to be a no-fault system, expansion of definitions of job-related injuries by adjudicatory decisions, fraud and abuse, increasing costs and improved work place safety.

Act 796 was designed to address these factors, providing employers with the tools needed for cost containment, while insuring legitimately injured workers get fairly compensated.

The act addresses legal disputes in three ways. It restores the doctrine of "exclusive remedy," to prevent civil actions being filed against employers. It directs administrative law judges, the Workers' Compensation Commission and the courts to construe the law "strictly," not "liberally" as in the past, and thirdly it strengthens the "statute of limitations" as applied to workers' compensation cases.

In the new act, an injury is compensable when caused by a specific incident and is identifiable by time and place of occurrence. A few exceptions include certain "occupational diseases and injuries." The prosecution of fraud and abuse is now required by law and supported by a staff within the Department of Insurance to investigate and assist local prosecutors in fraud cases.

A primary care physician will monitor all treatment and therapies for injured workers in a "managed care" program to reduce medical costs.

To improve safety in the work place, the commission will increase inspection and safety education, continuing close cooperation with the Arkansas Department of Labor. Insurance companies writing workers' compensation coverages must now provide accident prevention services to their clients.

The new law provides significantly increased benefits for partial and permanent injuries, vocational rehabilitation and funeral costs.

Also, employers who fail to provide workers' compensation coverage, needed medical services or who don't correct known safety hazards will face stiffer penalties.
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Title Annotation:Arkansas
Author:Russell, Ron
Publication:Arkansas Business
Date:Aug 16, 1993
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