Managing Workers’ Compensation Costs
Prescient National produced this thought provoking look at how to effectively use Post-Offer Medical Questionnaires as a part of your hiring practices. The original post can be found by clicking here.
When companies think of managing their Workers’ Compensation costs, several key programs may come to mind. For example, Early Return to Work, Post-Accident Drug Testing, and establishing a network of medical providers have become second nature in the course of doing business. While these post-claim activities will reduce costs after a claim has been filed, preventing a loss starts with strong hiring practices.
A comprehensive hiring program contains several standard components, such as pre-employment drug screening, criminal background checks, and reference checks. But perhaps none are more important than the Post-Offer Medical Questionnaire (POMQ). As health conditions, such as obesity, diabetes, and previous surgeries continue to contribute to Workers’ Compensation costs, employers who incorporate the POMQ can rest easy knowing they’ve taken every step necessary to ensure that employees can perform the essential functions of the job, without endangering themselves or others.
What is a POMQ and How Does it Mitigate Potential Injuries?
The POMQ is a document with questions about a prospective employee’s prior medical history. The POMQ helps an employer understand if the individual will be able to complete the essential functions of the job with or without a reasonable accommodation. Its goal is to help match the candidate to the physical requirements of the job and prevent putting an employee in a job that could be unsafe for him or her, other employees, and the company. It’s good stewardship.
Let’s use an example to illustrate: An employer in the home healthcare industry employs nurses who travel from one home to another to provide care. The company conducts pre-employment drug screening, motor vehicle record checks, as well as criminal background checks and reference checks, but it does not use a POMQ as part of its hiring practices. One day, while making a sandwich for a client, an employee bends over to pick up a piece of silverware that has fallen off the counter. When he stands up, he feels pain in his lower back and decides to file a Workers’ Compensation claim. When the claim is received by the insurance carrier, it is determined that the employee has had two prior back surgeries and that picking up the piece of silverware has aggravated his pre-existing back condition. After a doctor’s assessment, the employee is scheduled for a third back surgery, which will cost approximately $100,000. It is estimated that this claim alone will increase the employer’s experience modification rate from a 1.00 to a 1.50, which will cost the firm $500,000 in additional Workers’ Compensation premiums over the next three years. The employer was shocked to learn of the employee’s prior health condition and is frustrated that the employee cannot return to a “light duty” job, because the employee has been written completely out of work. Additionally, the employer is worried that the employee was placed in a position that required lifting and walking assistance for an elderly client, and wonder about future lawsuits from “negligent hiring” practices.
In the example above, the employer could benefit greatly from the effective use of a POMQ. Uncovering the prospective employee’s prior back surgeries would have allowed the employer to make a well-informed hiring decision, which would protect both the employee and its client population from injuries. For the POMQ to be “effective”, an employer must follow the rules of its use.
How to Use the POMQ
Under the Americans with Disabilities Act (ADA), employers are allowed to conduct medical inquiries of prospective employees as long as certain rules are followed. First, the document can only be used after a job offer has been made (i.e., “post-offer”), but before the employee is placed into the job. This means, for example, an employer cannot ask an applicant to complete a POMQ while filling out an application. Just as with background checks and drug tests, POMQs can also be part of the contingent post-offer process, but only if all new employees in the same job category are required to complete a POMQ. All information on the POMQ is protected health information and must be handled responsibly (typically by HR), kept confidential, and secured separately.
An applicant must be provided with a copy of the written job description that outlines the physical requirements of the job. The questions on the POMQ must be “job-related and consistent with business necessity.” This means that the job must contain physical exertion that has been documented and is essential. It also means that employers cannot inquire about any family medical history. The job description in our home healthcare scenario, for example, may require employees in the position to be able to lift 50 lbs. The POMQ will include a question related to the amount of weight an individual can comfortably lift unassisted. If the candidate is unable to meet this requirement, the employer will solicit a medical opinion and provide the doctor with a copy of the written job description. The candidate can meet with his or her own physician or with the company physician to determine if the job requirement can be met and what, if any, accommodations can be made to meet those requirements.
Depending on the physician’s medical assessment, the employer (assisted by feedback from the candidate), must determine if the recommended “reasonable accommodation(s)” can be made to enable the candidate to meet the essential requirements of the job. This may involve modifying the job, if possible, or purchasing additional equipment to help with the task, depending on whether this is a reasonable expectation for the business to undertake. If no reasonable accommodation is available, an employer can withdraw the offer.
POMQ Red Flags
There are certain red flags to look for in a POMQ. Ensure that every question on the POMQ is answered. Often, we see a candidate forget to complete a question or perhaps even refuse to answer a question. All questions should be addressed to avoid potential issues down the road. Look carefully to see if the candidate documents something that doesn’t match with the requirements of the job to address any discrepancies or potential problems. Also, make sure the document is signed by the candidate.
Note: If a candidate is untruthful on the POMQ and aggravates a pre-existing injury on the job, in many states the claim may be denied. In most cases, the injury/aggravation must be to the same body part where he or she suffered a prior injury which was not disclosed. Typically, it must also be established that the employer would not have hired the employee if he or she had indeed disclosed the prior injury and the injury would not have allowed him or her to safely perform the essential functions of the job, with or without a reasonable accommodation.
At Prescient National, we believe that well-informed hiring decisions drive down costs and improve employers’ profitability. Used correctly, a POMQ is a good tool to optimize employee safety and to help mitigate potential claims. Hiring employees fit for duty is productive for the staff, insulates an employer from legal liability, and enhances safety throughout the organization.
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Contact Professional Employer Organization (PEO) Expert, Reni Snider
Reni Snider is a Senior Account Executive for Libertate Insurance Services, LLC and has been with the company since December of 2014. Learn more about Reni.
Specializing in PEO Services: Workers Compensation, Mergers & Acquisitions, Data Management, Insurance Focus on: Employment Practices Liability (EPLI), Cyber Liability, Health Insurance, Occupational Accident, Business Insurance, Client Company, Casualty and Disability Insurance.
