Employers

FAQs – Frequently Asked Questions


Q:
How do HEMIC policyholders qualify for dividends?
A:

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

Q:
Can I get a copy of the Dividend Plan?
A:

Yes. It is on the HEMIC website behind your Employer Login.

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

By law, dividends cannot be guaranteed. The criteria for declaring a dividend are decided by 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 our rating agency status, and to otherwise fulfill our mission. The Board may declare a dividend whenever all of these obligations have been successfully achieved.

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

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

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

TTD is a wage replacement or time loss benefit paid to a worker who is unable to perform their job due to a work-related injury. To receive this benefit, the worker must be certified as disabled by his or her doctor. The TTD benefit is temporary in nature, and is paid until 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, which is a required statutory “waiting period”. The first 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. This is why it is important to notify your claims specialist immediately if an injured worker has missed 3 or more days of work.   

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

This is an important concern. When an injured worker files an application for unemployment benefits, they are certifying that they are capable of performing work. Unemployment certification is contrary to the medical certification of disability from work that is required to receive TTD benefits:  it may impact your obligations within the workers compensation claim. You should immediately report any unemployment application or information to your claim specialist. This consideration is independent of your position as an employer to contest or accept the unemployment claim.

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

When an injured worker suffers the loss of a body part, the loss of use of a body part, or the permanent loss of a physical function due to a work-related injury, he or she may have a permanent disability and is entitled to compensation 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 their medical records, then provide a report or “rating” of their findings and measurements of the impairment or loss of function. 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, which is 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. 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 it is necessary to complete prior to closing a 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 "subrogation" and what are the benefits?
A:

When a worker’s injury is caused by the actions of a wrongdoer or a third-party (and not the workplace), subrogation is the legal right of the employer and insurance carrier to pursue compensation recovery from them.  Subrogation may be pursued with or without the participation of the injured worker. The goal of subrogation is to recover from the wrongdoer monies that the employer or insurance carrier have paid to the injured worker for injuries actually caused by the wrongdoer’s actions. A subrogation recovery reduces the net loss of the claim, which may impact the employer’s Experience Modification Factor (X-Mod) and/or premium.

Q:
Should I call my Claim Specialist when a worker returns to work?
A:

Yes. To ensure accurate and proper payment of workers’ compensation benefits, notify your claim specialist immediately when your worker returns to work.

Q:
We have had an excellent safety record. How will a costly claim impact my premium?
A:

A costly claim will not affect the premium for your current policy. However, future policies and premiums may be affected if the claim is significant enough to adversely impact your Experience Modification Factor.

Q:
What is the Experience Modification Factor and how does it affect my premium?
A:

Your standard annual premium for workers’ compensation coverage is determined by the industry in which you operate and this equation:

Annual Gross Wages Paid   X   The Established Dollar Rate for Every $100 of Payroll

  X   The Experience Modification Factor = Standard Annual Premium    

The experience modification factor (usually known in the industry as “X-Mod” for short) is calculated every year by the NCCI.  The calculation formula uses claims information from your company’s prior three years.  The formula is weighted to place more emphasis on the frequency of claims, so it is very important to focus your efforts on loss prevention to maintain a good X-Mod.  An X-Mod of 1.0 is considered average, but beating the average will lower your insurance costs.

Q:
What is done by Department of Labor & Industrial Relations (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. These agencies are responsible for providing general workers’ compensation information to the public, overseeing claims, and conducting hearings on workers’ compensation claims. The DLIR has offices on Oahu and in Hilo, West Hawaii, Maui, and Kauai. A separate federal office exists to oversee claims covered by federal laws.

Q:
What if I disagree with the worker's' description of the cause of the injury?
A:

Contact your claim specialist immediately to explain why you disagree and why you suspect fraud. Your reasons may include:

  • the details of the incident
  • contrary objective or witness information
  • inconsistent statements or facts
  • suspicions as to other reasons for the injury
  • etc.

Keep your concerns confidential within your office, and only discuss them on a need-to-know basis. The claim specialist will determine the course of follow-up actions.

Q:
What if I know that my worker isn't as disabled as they claim to be?
A:

Contact your claim specialist immediately with all available information that supports your concern. This may include personal observations, co-employee statements, and other information that may provide the basis for an investigation.

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

TDI is a disability benefit for non-work related injuries. Workers’ compensation is a benefit for work-related injuries. A worker is not allowed to receive both these benefits for the same injury, since an injury is either work-related or non-work related. In some situations, while awaiting an outcome of the workers’ compensation claim, an injured worker may file and receive TDI benefits. If TDI benefits are received and the injury is later determined to be work-related, the worker will need to pay back the TDI carrier for any TDI money they received.

Q:
What if I suspect the injuries were a result of the worker’s willful intention to injure himself or herself, intoxication or possible illegal substance abuse?
A:

Contact your claims specialist immediately with any information that supports your concerns. Any additional information you have may affect your WC-1 position on denial of liability. Be sure to keep your concerns confidential within your office, and only discuss them on a need-to-know basis. You may also want to contact your company attorney to discuss these issues and applicable company policies.

Q:
What if I know or suspect that an injured worker receiving disability benefits is active (surfing, fishing, golfing, working, etc.)?
A:

Contact your claims specialist immediately with all available information about your suspicions. Often comments or statements by co-employees or your own personal observations may provide a basis to investigate an injured worker’s disability status. Keep this information confidential within your company. Discuss it only on a need-to-know basis.

Q:
What do I do if I don't have all the information needed to complete the WC-1?
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 that you contact the claims specialist 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 your claims specialist.

Q:
What if I suspect a general contractor, subcontractor or third person is responsible for my worker’s’ injuries and now I have to pay the claim? What should I do?
A:

Contact your claims specialist immediately with the information supporting your concerns and an evaluation can be made whether any action for reimbursement and recovery from the wrongful party is possible.

Q:
If one of my workers has a pre-existing condition and/or disability and is injured while working for my company, what am I responsible for?
A:

You are legally responsible for the injuries sustained by the injured worker while employed with your company. With any employee you hire, you “take the employee asis”, so an employee that has a pre-existing condition or disability and is injured in your employ often requires reliance on medical opinions to separate the medical and legal consequences of the work-related injury from the medical and legal consequences of the pre-existing condition or disability. If a dispute exists as to your responsibilities, then medical opinions and determination by a hearing at the DCD may be required to administratively determine the extent of your responsibilities for payment of benefits to the injured worker. Since each situation is factually dependent, these matters should be discussed with your claims specialist to ensure a thorough investigation and evaluation of this issue is completed.

Q:
What should I do if my worker gets an attorney? Can I still talk to them?
A:

Inform your claim specialist of the attorney’s involvement. Unless you are instructed by your attorney or the injured worker is instructed by his or her attorney not to speak to you about the case, you can still talk to your worker as his or her employer. It’s a good rule of thumb to always be careful discussing any matters regarding the workers’ compensation claim with the injured worker to avoid confusion, misunderstanding or communicating any information that is different than what your claim specialist has said or done. If you are uncertain how to answer a question from your injured employee about any aspect of the workers’ compensation claim, please contact your claim specialist.

Q:
I received a Notice of Hearing on the claim, should I attend?
A:

We encourage policyholders to attend hearings, because your attendance demonstrates your concern for your workers and the proceedings with the claim. If you wish to attend, please contact your claim specialist as far in advance of the scheduled hearing as possible.

Q:
As the employer, do I have any input in the selection of my injured worker's treating physician?
A:

Generally, the injured worker selects his or her treating or attending physician. Some employers offer suggestions if the injured worker inquires or does not have a doctor in mind. In the case of a work-related injury where there is a need for immediate emergency care and treatment, the employer is encouraged to help the injured worker secure emergency care and treatment. In such situations, the concern is to afford the injured worker all reasonable and necessary medical care and treatment the injury requires.

Q:
What happens if an injured worker wants to use a physician other than the one he or she initially began treating with?
A:

The injured worker is allowed to select his or her attending doctor and thereafter, is allowed to make one change of doctor without requiring the consent or approval of the employer or carrier.  Any subsequent change of doctor requires the approval or consent of the employer, carrier or DLIR to be valid under the workers’ compensation law.