Agents

FAQs – Frequently Asked Questions


Q:
What is the eligibility and process an Insurance Producer or Agency must take to obtain an appointment with HEMIC?
A:

The producer or agency must be licensed and residing in the State of Hawaii. HEMIC may make the appointment, provided the following requirements are fulfilled:

  1. Be in good standing with the Hawaii Insurance Division
  2. Submit two original Notice of Appointment of General Agent form 402/404, completed and signed
  3. Copy of Errors & Omissions policy or certificate of insurance with a minimum of $1,000,000 occurrence/aggregate
  4. Copy of the producer or agency’s license
  5. Federal Employment Identification Number
  6. Insurance Agency profile
Q:
What is the Cornerstone Agency Program?
A:

This is a program for top producing insurance agencies that have demonstrated proficiency when representing their clients with HEMIC. Cornerstone agencies receive an enhanced commission and other benefits. They also provide valuable feedback to HEMIC, so we may better serve our policyholders.

Q:
Are all Insurance Producers and Agencies licensed in Hawaii guaranteed access to HEMIC?
A:

No. While all Hawaii employers who pay their premiums, follow our safety and claims guidelines, and interact with HEMIC in good faith are guaranteed access, insurance producers and agencies are not. We will make every effort to accommodate all qualifying insurance producers and agencies through a selection process similar to, but more inclusive than, that of most other competitive insurance carriers. Hawaii licensed insurance producers and agencies that meet our qualifications and request an appointment may be contracted to represent their client with HEMIC, receiving one of three commission schedules based on their qualifications and the role they assign to HEMIC. 

 

Q:
Does HEMIC have multiple rating plans and how are they applied?
A:

HEMIC uses a five-tier rating plan. The applicable tier is determined by the policyholder’s service requirements and other characteristics of the risk. Policyholders with a poor loss history and/or who refuse to implement reasonable safety and claims practices may be subject to HEMIC’s high risk rating plan. This plan allows HEMIC to adjust those policyholders premium upwards to cover expected increased safety and claims costs.

Q:
What type of premium credits can be expected?
A:

Policyholders may qualify for one or more premium credits following completion of the Safety Credit Application.

Q:
What are the submission requirements?
A:

The submission to HEMIC should contain the following information:

  1. Accord 130 Workers’ Compensation Application.
  2. Four-year premium, payroll, and loss history (three prior years plus current).
  3. Loss runs from carriers for the past three years and current year.
  4. If there are no losses, a letter from the prior carrier will suffice.
  5. A copy of the current experience modification worksheet, if applicable.  For quoting purposes, we will accept the prior experience modification worksheet if current is not available but will adjust premium upon its receipt.
  6. A copy of the last two quarters Hawaii Department of Labor form UCB6.
  7. Supplemental applications are required for Aircraft Exposures, Federal Exposures, Leasing Companies, Bar/Tavern Exposures and Owner Builders.
Q:
When do rate changes apply to the workers compensation policy:
A:

It will be applied upon your first renewal AFTER the effective date of the rate change.

Q:
What if the employer has knowledge of an injury but unable to fully complete the WC-1 form?
A:

By law, the WC-1 must be submitted within seven (7) days of the industrial accident or the employer may be subject to a penalty. It is important to contact the claims specialist at HEMIC with all available information prior to expiration of the seven (7) days. Questions about the WC-1 and timely submission should be immediately discussed with the claims specialist.

Q:
What should an employer do if fraud is suspected of a Workers Compensation claim?
A:

The employer should notify the claim specialist immediately in order to initiate an investigation of a suspected fraudulent claim. Upon determination of fraudulent activity, a hearing must be held before the Disability Compensation Division.

Q:
How does a HEMIC policyholder qualify for a dividend?
A:

Policyholders who have been insured with HEMIC for more than one policy year, and who possess demonstrated safety records, qualify for the dividend according to the rules of the dividend distribution plan adopted by the Board.

Q:
What is Temporary Total Disability (TTD), and when is it owed to a worker?
A:

TTD is a form of wage replacement or lost time benefits paid to an injured worker who is not able to perform work for the employer because of the work related injury, and, have been certified as disabled by the worker’s attending physician. This benefit is temporary in nature and paid to the injured worker until such time the injured worker is able to return to work.  By law, no payment of TTD is owed for the first three (3) days of disability, referred to as the required statutory “waiting period”. The first check or payment for TTD is due to the worker within ten (10) days of the employer’s knowledge that the injured worker has lost time from work due to a work related injury or illness. These requirements underscore the importance of immediately notifying your claims specialist if an injured worker has missed three (3) or more days of work.

Q:
How is TTD calculated?
A:

The workers’ compensation law sets the TTD benefit at 2/3 of an injured worker’s regular wages. This is calculated by multiplying the worker’s average weekly wage (AWW) by 0.6667. If a worker routinely works overtime, does shift work, or performs jobs with differing hourly rates, you must complete a WC-14 form which outlines (or in some cases, averages) the worker’s wages for the 52 weeks prior to their date of injury. This provides the most accurate TTD benefit for the injured worker.

Q:
Are TTD benefits taxable?
A:

No, TTD benefits are not taxable, however some tax forms may require the injured worker to report what was received. The injured worker should seek advice from a qualified tax expert.

Q:
What happens if an injured worker files for unemployment benefits while receiving TTD?
A:

This is an important area of concern. When filing an application for unemployment benefits, the injured worker certifies that he/she is capable of performing work. This unemployment certification is contrary to the medical certification of disability from work required for the receipt of TTD benefits and may impact an employer’s obligation within a workers’ compensation claim. The employer should immediately report any unemployment application or information to the claims specialist at HEMIC. This consideration is independent of the employer’s position to contest or accept the unemployment claim.

Q:
What happens if an injured worker receives Temporary Disability Insurance (TDI) benefits and workers' compensation benefits?
A:

TDI is a form of disability payment for a non-work related injury. Workers’ compensation is a state law that covers work related injuries. A worker is not entitled to both of these benefits for the same injury as the injury cannot be both non-work related and work related. However, in some situations, while awaiting an outcome of the workers compensation claim, injured workers may file and receive TDI benefits. If TDI benefits are received and the injury is later determined to be work related, reimbursement is usually owed to the TDI carrier.

Q:
What is “modified duty” and how is it a benefit?
A:

Modified duty is the work an injured employee can perform after an injury, taking into account any restrictions or limitations noted by their doctor. Modified duty may be temporary or permanent, depending on the injury and the course of recovery. Many employers maintain a modified duty plan or program that provides transitional work that meets the injured employee’s physical capabilities within their organization. If this is not feasible, HEMIC can help match injured workers with non-profit organizations with suitable, light-duty roles.

Studies indicate that a timely return to modified duty benefits both the injured worker and employer by keeping an injured worker physically conditioned, speeding their recovery, and reduces the total cost of the claim.

 

Q:
What is "medical stability"?
A:

Medical stability is the point at which the injury has reached maximum medical improvement and will not improve with further medical care or the passage of time. The medical condition has stabilized. Medical stability must be established before a determination of PPD is made. The worker may or may not have reached pre-injury status when stability is determined. The following terms are also used synonymously: maximum medical improvement (MMI); permanent & stationary (P&S).

Q:
What is an Independent Medical Examination (IME) and when is it used?
A:

An IME is a medical examination by an independent, qualified physician used to evaluate the injury and the claim. The doctor may be asked to provide information on and opinions about: the injured worker’s prior medical history, the nature of the accident and injury, the cause of the injury, whether the injury is work-related, non-work related causes, medical treatment and prognosis, medical stability, ability to return to work, PPD, consultations and referrals, testing and other related factors. IMEs can also address future medical care and treatment.  IMEs can be conducted with or without an Order by the Director of Department of Labor.

Q:
What is "subrosa" and when is it used?
A:

Subrosa is a confidential investigation into the claim. Subrosa is not used frequently, but it is an investigational tool that can be used when the claim specialist determines that there are questionable statements and activities within the claim. An injured worker may or may not be told about a subrosa investigation. Subrosa is typically performed by private investigators hired by the insurance provider. Subrosa may involve background checks, factual and witness investigation, observation of the injured worker, and development of possible leads for further investigation.

Q:
What are the Department of Labor & Industrial Relations, State of Hawaii (DLIR) and Disability Compensation Division (DCD)?
A:

The Department of Labor and Industrial Relations or DLIR is the state agency responsible for administering and overseeing state workers’ compensation claims in Hawaii. The DCD is a division within the DLIR. The DLIR and the DCD have the responsibility of providing general workers compensation information to the public, overseeing the claims, and conducting hearings on workers’ compensation claims. The DLIR has offices on Oahu, Hilo, West Hawaii, Maui, and Kauai. A separate federal office exists to oversee claims covered by federal laws.

Q:
What is vocational rehabilitation (VR), who gets it and why?
A:

Vocation rehabilitation services are the vocational review and retraining services provided to an injured worker who is not able to return to the usual and customary employment he/she was performing at the time of the work related injury. VR services are provided by licensed vocational rehabilitation consultants (“VRC”) and the VRC selected by the injured worker. The role of the VRC includes but is not limited to confirming an injured workers vocational abilities, inability to return to the usual and customary employment with the employer, alternatives for permanent modified positions with the employer, which if unavailable, then providing a job search and possible schooling and training for work with another employer. While enrolled in VR, the injured worker continues to receive weekly TTD benefits. VR is often an area of contention in a claim.

Q:
Is the worker entitled to vocational rehabilitation services if only employed for a short period of time?
A:

All injured workers are eligible for this benefit if they are unable to return to their usual & customary employment due to the work related injury, regardless of the duration of employment with you.

Q:
Does HEMIC plan to give a dividend every year?
A:

By law, dividends cannot be guaranteed. Consideration for declaring a dividend is at the discretion of the Board of Directors. Their first obligation is to assure that HEMIC has sufficient surplus to be financially secure, to meet State surplus requirements, to maintain its rating agency status, and to otherwise fulfill its mission and purpose. The Board may declare a dividend whenever it determines that HEMIC has sufficient surplus to fulfill the aforementioned requirements in addition to payment of the dividend.

Q:
How can HEMIC afford to pay dividends?
A:

HEMIC is in a strong financial position with adequate surplus to meet all statutory requirements and is rated “A” excellent & secure by AM Best. The dividend distribution in no way compromises that strong financial position.

Q:
What is ‘modified duty’ and how is it a benefit?
A:

Modified duty is the work an injured employee can perform after an injury, taking into account any restrictions or limitations provided by the attending physician. Modified duty may be temporary or permanent, depending on the injury and the course of recovery. Many employers maintain a modified duty plan or program that provides transitional work that meets the injured worker’s physical capabilities within their organization. If this is not feasible, HEMIC may assist in matching injured workers with non-profit organizations in suitable, light-duty roles. Studies also indicate a timely return to modified duty will benefit both the injured worker and employer by keeping an injured worker physically conditioned, speeds the employee’s recovery and reduces the total cost of the claim.

Q:
What is Permanent Partial Disability (PPD), and when is it payable as a benefit?
A:

When an injured worker suffers the loss of a body part or loss of use of a part of the body, or, permanent loss of a physical function (impairment) as a result of the work related injury, he/she may have a permanent disability and is entitled to a benefit for this loss. The benefit paid for this permanent disability is referred to as permanent partial disability or PPD. To make this determination, medical experts will examine the injured worker and/or related medical records; provide a report of their findings and measurements of the impairment or loss of function, referred to as a “rating”. This rating may cover a variety of factors such as a diagnosis, range of motion, loss of strength, sensory loss, etc. The rating is expressed in terms of the percentage of functioning lost or the extent of the impairment related to the injury. Impairment, a medical term, is then converted to “disability” or PPD – a legal concept under the law.  The law provides 1) a schedule and formula for determination of PPD benefits, which when calculated  is also expressed as a specified number of weeks of payment  due the injured worker for the particular body part involved, and, 2) an annual maximum weekly compensation rate, decided by the Department of Labor, to be used in the formula. A physician’s rating of impairment combined with the schedule and the annual rate of compensation for the year of the injury, are used to determine the amount of PPD benefit owed the injured worker for this permanent loss of a body part or function. This process typically occurs after the injury has resolved and is necessary to complete prior to closing a claim.

Q:
What is "subrogation" and what are the benefits?
A:

Subrogation is the legal right an employer and insurance carrier have to pursue recovery from a wrongdoer or third party for the injuries suffered by the injured worker due to the wrongdoer’s or third party’s actions. Subrogation may be pursued with or without the participation of the injured worker. The goal of subrogation is to recover from the wrongdoer monies paid by the employer or insurance carrier to injured workers for injuries actually caused by the wrongdoer’s actions. A subrogation recovery will reduce the net loss of the claim, which may impact either the premium or x-mod.