HOW THE PROCESS WORKS

Due to high insurance costs, frustration with the statutory system and lengthy litigation of workers' compensation claims, labor and management in the construction industry succeeded in having the 1995 Minnesota legislature create a law allowing them to develop a binding alternative claim administration system. By working jointly with local insurance industry consultants, and relying on the components of successful programs operating in other states, a labor-management Board of Trustees created an alternative program for Minnesota: the Union Construction Workers' Compensation Program (PROGRAM).

Primarily by using workers' compensation experts (legal, medical & vocational) selected jointly by labor and management to intervene in any claim dispute and get the problem fixed in a few hours or days, litigation and its associated costs is avoided. This alternative dispute resolution (ADR) process is binding on all parties, and discourages the use of defense or plaintiff attorneys in the early stages of the dispute. The structure of the ADR process encourages a faster return-to-work, or faster claim settlement, and avoids extraneous employment issues.

A joint Labor-Management Board of Trustees (see our Documents page for a list of the Trustees) provides oversight for the PROGRAM. Daily operations are provided by Kevin Gregerson, program administrator, and his staff from Wilson-McShane Corporation. Mr. Gregerson has extensive background in both workers’ compensation systems and labor-management relations.


PROGRAM COMPONENTS

The PROGRAM has four main components: the Alternative Dispute Resolution system; the Neutral Examiners Panel; the Exclusive Provider Organization; and the Qualified Rehabilitation Consultant (QRC) Network.


ALTERNATIVE DISPUTE RESOLUTION SYSTEM

This component has three steps: facilitation, mediation & arbitration.
The first step, facilitation, is essentially a informal meeting of the parties to discuss the issues involved in a dispute. The purpose of the facilitation is to provide informal resolution. If the parties can not reach an agreement, the facilitator will issue within 10 days a determination which is binding on the parties subject to an appeal. If any of the parties do not agree with the determination, they have 60 days to apply for mediation. At the facilitation step, legal counsel may attend.

The second step, mediation, occurs within 21 days of a request for Mediation. This meeting is held with an experienced workers' compensation litigation attorney under contract to the Trustees. The purpose of mediation is to again attempt to settle the dispute by providing confidential advice to each of the parties. Legal counsel may attend. If the parties can not reach an agreement, they have 30 days to apply for arbitration.

The third step, arbitration, is similar to an administrative hearing and is held within 30 days of the request for arbitration, unless additional discovery is required. In all cases, only the arbitrator may approve a continuance of the arbitration. The arbitrator's decision is rendered within 10 days of the arbitration and is binding subject to an appeal to the Minnesota Workers' Compensation Court of Appeals. The arbitrator has the same authority as a judge at the Office of Administrative Hearings. At this step, all parties are required to have legal counsel.


NEUTRAL EXAMINERS PANEL

The Union Construction Workers' Compensation Program does not allow the insurer, the injured employee, or their attorneys to hire their own doctor for an "independent" opinion. Instead, upon request of either party, the dispute facilitator arranges for an opinion from one of the neutral examiners approved by the Board of Trustees for this purpose. These examiners have been selected based upon several criteria, such as timeliness of reports, thoroughness of examinations, opinions based upon sound medical reasoning and an accurate review of all records. All parties are allowed input to the neutral examiner, but only through the facilitator. Copies of correspondence to the neutral examiner as well as their examination report are provided to all parties. As a result, the majority of the opinions from these neutral examiners are not disputed by either party.


EXCLUSIVE PROVIDER ORGANIZATION

It is the intent of the Trustees that injured union workers of participating contractors will have the very best medical care available within reasonable driving distance of their homes and worksites. The Trustees believe this customized network of health care providers will improve treatment outcomes through: using more qualified primary care providers (occupational medicine specialists); quicker approval and appointments for specialty exams; fewer treatment and treating doctor disputes; credible and consistent light-duty work restrictions; faster recovery and return to work earning union wage scale and fringe benefits; and, possibly, an overall reduction in the cost of medical treatment.

Every doctor in the EPO must meet criteria established by the Board of Trustees. Any doctor not continuing to meet these criteria will be removed from the EPO. Injured workers must seek treatment from a physician who is a member of the EPO, with a few exceptions. The EPO has physicians from a variety of medical specialties. Doctors are available in most of the geographic areas of Minnesota where participating contractors are located, and more will be added as the PROGRAM grows. In areas where there are insufficient providers in the EPO, we ask employers and unions to help us identify candidates for consideration. The EPO list will be updated monthly. Therefore, we recommend that you visit the website each time a referral is needed rather than printing off a list.

Of course, when there is a life-threatening injury which requires emergency care, the employee should be seen at a nearby emergency room, whether that facility is associated with the EPO or not. If the injury requires urgent care, the employee may be seen at any Occupational Medicine clinic during regular business hours, or at any Urgent Care clinic after hours.

The Board realizes that occasionally there will be a good reason to treat with a doctor who is not in the EPO. For details as to when an injured union member may opt out of the EPO, see Section 10 of the PROGRAM rules which can be found on our website in the Documents section.

A call center, administered by CorVel Corporation, is available to employees, employers, and insurers needing a referral to an appropriate and convenient health care provider. The CorVel Call Center can be reached during regular office hours at 877-838-6841.


QUALIFIED REHABILITATION CONSULTANT (QRC) NETWORK

PROGRAM Trustees have created a select list of experienced Qualified Rehabilitation Consultants (QRCs) to provide assistance to injured union members and their contractors. These QRCs understand the demands of the construction industry, and are known for their professionalism, medical expertise, neutrality and excellent communication skills with physicians, injured workers and employers. Both the employer and injured employee are limited to the QRCs on the PROGRAM's list.

Employers don’t contribute to health & welfare funds, pension plans, or social security when union workers aren’t performing bargaining-unit work, and workers' compensation doesn't compensate injured employees for the loss of fringe benefit or social security contributions. Because of that, and because few jobs provide a better wage and fringe benefit package than union construction work, QRCs in the UCWCP do all they can to help union workers get ready to return to work in their usual trade as soon as safely possible.

Furthermore, the contractors in the UCWCP are committed to providing light-duty employment to their employees whenever possible. The Trustees believe that everybody wins with that approach: contractors reduce their workers' compensation claim costs and injured workers are more likely to return to full-duty in their chosen trade.

WHY SHOULD A CONTRACTOR CONSIDER ENROLLING IN THIS PROGRAM?

Reducing Claim Losses:MONEY

Local and national research studies show that the cost of a workers' compensation claim increases astronomically if it enters litigation, and often results in no return to work. By keeping all interested parties communicating until the problem is solved, excessive medical care and the need for attorneys (and litigation) is avoided, and the rate of return to work increases. Savings are derived primarily from eliminating the direct and indirect costs associated with litigation that often occur with both legitimate and fraudulent claims. And, as the time to closure of the claim becomes shorter, the reserves assigned to the claim are taken off that much sooner.

Avoiding Lengthy Litigation: TIME

While labor and management are changing the adversarial culture of workers' compensation claim administration to one of fairness and quick resolution of the claim, there are some instances when litigation is necessary. Therefore, the Trustees have implemented shortened timeframes to reach a binding decision on the dispute, reducing the amount of time required to monitor the litigation. While the Minnesota statutory system takes an average of 16 to 24 months to reach a trial judge, this alternative dispute resolution (ADR) system reaches arbitration within 4 to 6 months.

Open Insurance Program: CHOICE

The program is NOT a provider of insurance, nor does it require the employer to work with particular insurance agents or insurance carriers (individual and group self-insurance is allowed as well). The ADR program is a complement to the employer's safety and insurance program, allowing the contractor to obtain insurance at the most competitive rate.

Disputed Claim Experience: RESULTS

From July 1, 1997 through 12/31/06, 8,492 claims had been filed against participating contractors, of which 2,115 involved lost-time accidents. Of all of these claims, only 14 claim disputes have gone on to arbitration (formal hearing)-less than 1%!! According to the Minnesota Department of Labor & Industry, 3% of lost-time claims in the state system go on to a formal hearing-a more than three-fold increase in the litigation rate!

Benefit Fund Coordination: COMMON SENSE

Union employers provide multiple benefits from different funds for their employees. When a dispute arises over who the payer of the claim should be, litigation costs for each of the insurance programs/funds involved are eventually paid from money collected from the same employer. In this program, the dispute facilitator is able to talk informally to all potential payers (w.c. carrier, health & welfare fund, auto carrier, etc.) with an understanding of all the statutes, available benefits and plan requirements in mind, and identify the most appropriate payer without resorting to unnecessary subrogation or litigation.

HOW DO I SIGN UP, AND WHAT DOES IT COST?

You must be signatory to at least one participating union, and your insurance provider must be approved as a sponsor of the PROGRAM. A list of sponsoring insurance providers and participating unions can be found on our Documents page, in "Who's On Board". Enrollment can occur within 30 to 60 days.

To enroll in the program, go to the Documents page, and follow the instructions on the "Enrollment Checklist". Upon reciept of a fully completed application, an acceptance letter with an implementation kit and specific instructions will be issued, and a training session will be provided for your office/field staff who interact with workers' compensation issues. Your enrollment date will be on the first of the next month. Only claims occurring after the date of enrollment are covered by the Program. Training will also be provided to your insurance provider's claims administrator.


PROGRAM FEES: SUBSCRIPTION AND USER FEES

The administrative costs of the Program are paid for by enrolled contractors and their insurance providers. There are two types of fees: Subscription Fees (paid by the contractor) and User Fees (paid by the insurance provider). Fees are reviewed annually by the Board of Trustees. However, in over eight years of operations, there has never been a fee increase.

NOTE: some insurance providers will provide a premium credit to offset the cost of the Subscription Fee. See the "Insurers" tab for more information.


SUBSCRIPTION FEES

Through June 30, 2008, the following formula shall determine the Subscription Fees: Thirteen cents per $100.00 of Calendar Year 2006 payroll of your participating union employees, to a maximum of $7,800.00 per year. Beginning on July 1, 2008, Calendar Year 2007 payroll is utilized.

EXAMPLE
$1,000,000.00 Calendar Year payroll of employees in participating unions:
$1,000,000.00 x .0013 = $1,300 THIS IS AN ANNUAL FEE Payments can be made quarterly, semi-annual or annual.

Regardless of payroll amounts, there is a minimum fee of $1,020.00 and a maximum fee of $7,800.00 per year.

The Subscription Fee covers the following:

- Assisting the contractor, agent and insurer with the enrollment process: application, insurance filings, and staff training;
- Full-time dispute facilitator (first step of ADR system);
- Administrator of all Program components: mediation/arbitration panel; neutral physician panel; neutral vocational rehabilitation provider network; scheduling mediation sessions and arbitration hearings; scheduling neutral evaluations; administering the Exclusive Provider Organization (EPO).
- Communications, education and marketing;
- Servicing of Board of Trustees and subcommittees;
- Consultant Services: Trust counsel; ADR rules advisor; annual audit; government reporting; website administration; EPO contract administrator.


USER FEES

Additional program services are paid for only if used. These are paid by the insurance carrier as a loss adjustment expense.

The services and fees are:
- Mediation: Actual charge
- Arbitration: Actual charge
- Neutral Physician Opinion: Actual charge

If you are interested in more information, please call Kevin Gregerson, the Program Administrator at (952) 851-3462.

Who's On Board?

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