The Lutgert Insurance Blog

Regular physical activity is one of the most important things you can do for your health. People who are physically active live longer and have a lower risk for heart disease, stroke, type 2 diabetes, depression, and some cancers. Take a few minutes to figure out how to add physical activity to your life. Find something you enjoy, such as jogging or running, dancing, or playing sports.

  • Take the stairs instead of the elevator.image002
  • Park farther away and walk.
  • Walk the dog.
  • Take family walks or play active games together.

Sourced from Centers for Disease Control & Prevention

image002Immunizations are NOT just for kids! Regardless of your age, we ALL need immunizations to help keep us healthy. Vaccines reduce the risk of infection by working with the body’s natural defenses to help it safely develop immunity to disease. Take a few minutes to protect yourself and others from diseases.

  • Keep track of your and your family’s vaccinations as they’re received.
  • Make an appointment with your and your family’s doctor to make sure vaccinations stay up-to-date.

OSHA announced it is delaying enforcement of the anti-retaliation provisions in its new Injury and illness tracking rule to conduct additional outreach and provide educational materials and guidance for employers. Originally scheduled to begin August 10, 2016, enforcement will now begin November 1, 2016, according to the agency.

Under the rule, employers are required to:

  • Inform workers of their right to report work-related injuries and illnesses without fear of retaliation; Implement procedures for reporting injuries and illnesses that are reasonable and do not deter workers from reporting; and
  • Incorporate the existing statutory prohibition on retaliating against workers for reporting injuries and illnesses.

An interim final rule released June 30 by the Department of Labor outlines increases to the fines employers will pay for violating wage and hour and safety laws.

The rule, scheduled to be published in the Federal Register on July 1, increases penalties under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The Act amended the Federal Civil Penalties Inflation Adjustment Act of 1990, and requires agencies to update their civil monetary penalties.

The rule includes fine increases for violations of the Fair Labor Standards Act (FLSA). Under the final rule, the penalty for:

  • A repeated or willful violation of minimum wage or overtime laws increases to $1,894 per violation.
  • A child labor violation increases to $12,080.
  • A child labor violation resulting in serious injury or death increases to $12,080.
  • A willful or repeated child labor violation resulting in serious injury or death increases to $109,820.

A number of posting penalties will also increase. Under the final rule:

  • The penalty for each willful violation of the Family and Medical Leave Act (FMLA) posting requirement increases to $163 for each separate offense.
  • Employers who violate the Occupational Safety and Health Act (OSHA) posting requirement face a maximum penalty of $12,471.
  • The penalty for any violation of the Employee Polygraph Protection Act (EPPA) of 1988 increases to $19,787.

Other OSHA penalties addressed by the final rule include:

  • Serious violation, which increases to a maximum of $12,471
  • Other-than-serious violation, which increases to a maximum of $12,471
  • Willful or repeated violation, which increases to a maximum of $124,709

These new penalties take effect August 1.


The simple act of buckling up is the best way to save lives and reduce injuries from crashes. Motor vehicle crashes are the leading cause of death for people between the ages of 5 and 34. Child safety seats reduce the risk of death in passenger cars by 71% for infants, and by 54% for toddlers ages 1 to 4 years. Using seat belts reduces serious injuries and deaths in crashes by about 50%. Take a minute to make sure you and your passengers are buckled up for safety.


  • Buckle your seat belt every time you drive or ride in a motor vehicle.
  • Make sure children are properly buckled up in a seat belt, booster seat, or car seat, whichever is appropriate for their age, height, and weight.
  • Make sure all passengers are buckled in before driving.

Sourced from Centers for Disease Control & Prevention

Taking five-minute breaks–whether you sit at a desk, do heavy construction work, or anything in between–can have several benefits. Below are examples of some activities you can do in five minutes or less for rest breaks.

  • Take several short breaks throughout the day. Make sure they include some movement.
  • Take a short walk away from your workstation.
  • Stand up and stretch or walk in place at your desk without looking at your computer monitor.
  • Get out of your chair whenever you take phone calls at your desk.
  • Change positions at your workstation.
  • Have a drink of water or a light snack.

Sourced from Centers for Disease Control & Prevention

***This article is part of a series.  If you haven’t read from the beginning please start here: WC 2.0- The Work Comp Claims Managment Program.***

We interrupt our tutorial on WC 2.0 to discuss some breaking news. That is, the recent ruling by the Florida Supreme Court on the Castellanos v. Next Door Company.

In a 5-2 decision the court decided that the attorney fee schedule in 440.34 of the WC law was unconstitutional. This was a “facial” challenge, meaning it ruled the schedule to be unconstitutional in all cases, as opposed to an “as applied” challenge, where it found it to be unconstitutional in this specific case.

The basis of the challenge was that the law created an “irrebuttable presumption”, resulting in a situation where an injured worker (IW) could not adequately access the WC system due to lack of attorney representation. The reasoning was that the WC system had become so difficult to navigate that an injured worker, particularly with a complex case that only involved a relatively small judgment amount, would be unable to receive the compensation promised by statute because no attorney would take the case.

The reason this law and fee schedule were enacted was to reduce attorney involvement in the WC system. It sought to eliminate the exact situation described in Castellanos; an IW who ended up receiving only $822.70 in benefits, but due to the complexity of the case, the lawyer’s fees would have been 107.2 hrs. x $350/hr. or $37,520! The fee schedule would have limited the attorney’s remuneration to $164.54…an equally absurd number for the amount of hours expended by the lawyer.

Florida had close to the highest WC rates in the nation prior to the fee schedule. After the fee schedule was utilized, the rates dropped by roughly 60%. This decision essentially returns us to the conditions that resulted in the extremely high rates.

I expect the legislature to respond to this ruling as soon as it is practical to do so. Hopefully, they will be able to devise a formula that will allow for reasonable remuneration for cases involving smaller benefits. With the exception of WC attorneys, no one wants to see us return to the rates we saw in the past.

It is unknown just how much this will affect WC rates or increase litigation. NCCI (National Council on Compensation Insurance) may consider proposing a midterm rate increase, if they calculate that this will have an immediate and substantial impact on WC costs. However, it appears that there is little question that this will increase WC rates going forward.

I did not agree with this ruling. I felt the dissenting arguments were compelling and that this qualified more as an “as applied” challenge than a “facial” one. I do agree that having no way to contest the fee schedule results in an unfair burden on attorneys and could potentially have a chilling effect on an IW’s ability to receive compensation benefits. However, just because a law does not work in every situation, it does not mean the law is unconstitutional “on its’ face”. It means it is a badly written law…there are many of those. Again, I am hopeful the legislature can find that middle ground.

There is another case currently pending before the Florida Supreme Court, Westphal v. City of St. Petersburg. This case is challenging whether the maximum temporary total benefit period of 104 weeks is constitutional. I have looked at all Florida’s surrounding states and the lowest maximum limit I found was 350 weeks, so it appears our limit of 104 is unusually low. As mentioned above, however, it may be a bad law, but that does not mean it is unconstitutional. I would expect we will be receiving that opinion soon.

Finally, a more serious case Stahl v. Hialeah Hospital was at first accepted by the FL Supreme Court then later dismissed for jurisdictional reasons. This case struck directly at the core of the FL WC law, essentially challenging it as the “sole remedy” for employees injured at work. Definitely something to keep an eye on.

What Employers Need To Know:
Besides knowing that WC rates are likely heading up, it is important that employers understand the importance of doing everything possible to minimize attorney involvement. The best way to do that is to properly manage your WC claims. Please read blog post WC 2.5- What We Can and Can’t Do- Part 2 if you have not done so. It explains the costs involved with settlements- virtually always the result of attorney involvement.

I will also deal with this in my next blog post, as it is vital that you know what you can do limit settlements. It deals primarily with the way you and your employees treat an IW; simple but very effective advice.

TL;DR- Takeaways- The recent FL Supreme Court ruling on Castellanos v. Next Door Company invalidated the attorney fee schedule for WC cases. This will result in more litigation and higher WC rates. Another case, Westphal v. City of St. Petersburg will be decided soon and may also result in increased rates. All steps should be taken by employers to minimize attorney involvement in WC claims.

Next blog post:
WC 2.7- Reducing Settlements

Please join our email list by filling out & submitting the form in the blue box on the right of this page and you will receive each blog post as it appears on our website. Feel free to call me at any time- Joe Carraher- W: 239-280-3209 or on my Cell: 239-293-7772.

***This article is part of a series.  If you haven’t read from the beginning please start here: WC 2.0- The Work Comp Claims Managment Program.***

In the previous post, we explained the nuts and bolts of lost time claims. There is a great deal more to discuss and understand regarding lost time, but for now the general overview will suffice.

This post will deal with the other two most common ways claims go from Medical Only (MO) to Indemnity- Permanent Impairment and Settlements.

Permanent Impairment- The correct term for this is Permanent Partial Disability. This is a situation where an injured worker (IW) incurs some sort of permanent change in their physical status that will hinder them in some way forever. An example may be a shoulder surgery that results in reduced mobility in the arm. Another might be an injury to the eye that affects their vision irreparably. These injuries are rated by making very specific measurements and assigning a percentage of impairment compared to the “whole body” concept. In the example above, a shoulder surgery may result in a 3% diminishment of the whole body, due to the reduced range of motion. There is a chart and formula for virtually every body part that could result in a permanent impairment and the specific measurements that must be made to determine the correct percentage. For more information on the specifics of this rule book, please check out the 1996 FLORIDA UNIFORM PERMANENT IMPAIRMENT RATING SCHEDULE:

After the percentage of disability is assigned, the insurance company then makes a lump sum payment to the IW, to allow them to close the claim (otherwise they would be paying a very small amount on the claim as long as the IW lived; hardly practical). The formula is 2 weeks of Average Weekly Wage for every 1% of impairment up to 10%, 3 weeks AWW for every 1% impairment from 11%-15%, 4 weeks AWW for 16%-20% and 6 weeks for 21% or higher.

For our purposes, what you need to know is that Permanent Impairment payments are made out of the indemnity “bucket” and any amount paid results in the claim going from MO to indemnity. As a general rule, these are out of our control. They are assigned by doctors based on the rating schedule above. If we feel a claim has a high degree of probability of going to surgery, we usually recommend the owner turn the claim over to the insurance carrier fully. There are some exceptions to this, but that is very claim specific.

This is a good time to mention something that is VITALLY IMPORTANT: Every claim is different; every injury, every worker, every company, every insurance carrier, every doctor. This is why partnering with someone with experience is so vital. Every claim must be managed individually to achieve the best outcome for the IW and the employer. The goal for the IW is always the same: get them the best medical treatment available, treat them with respect and care, get them back to work as soon as possible and see that they are paid for their time out of work. The goal for the employer is to accomplish this at the lowest possible cost. That is where our program and understanding how the Experience Mod really works helps the employer achieve that goal.

Ok, back to the final common type of indemnity.

The final, common form of indemnity claim is one that is closed through settlement. The majority of these are a result of the IW hiring an attorney. These almost always result in a settlement of some sort and those dollars are always, at least partially, paid out of the indemnity “bucket”. (Note: On 4/28/16 the Florida Supreme Court ruled that the attorney fee schedule in the FL WC law is unconstitutional. This will require the legislature to address it quickly. It is unknown at this time the impact this will have on WC rates, but it is assumed that this will result in more litigation and higher rates. I will address this in detail in the next post.)

Claims can also be settled at the request of the insurance company without attorney involvement. This occurs when an IW has received treatment for the injury, but has not reached Maximum Medical Improvement and the insurance company does not feel that continued medical care will produce a positive result in a reasonable period of time. They feel it makes more sense to offer the IW a lump sum to cover expected future medical costs and allows the carrier to close the case. These are often contentious situations between the IW and the employer, so it is vital that the employer obtain legal counsel to navigate this type settlement. Much more on this topic in future posts.

If a case settles, it will be an indemnity claim and cost you substantially more than a MO case. The good news is; the vast majority of these can be avoided by utilizing our system. Clients who follow our program have an extremely low incidence of settlements; far below the norm. There are good reasons for that and I will get into it in detail in future posts.

This is not a perfect science, however. It is a program that educates you on the proper ways to structure your business and manage your WC claims to minimize your WC costs. Lost time is something we can affect in many cases, permanent impairment we can’t, settlement we can reduce to a very small number. Combining these techniques will result in the lowest Experience Mod your company can achieve, given the losses that occur. Not utilizing them will insure that you will end up with the highest Experience Mod possible given your losses. Which one would you prefer?

Next blog post:
WC 2.6- Supreme Court Cases That Affect YOU (Coming soon!)

Please join our email list by filling out & submitting the form in the blue box on the right of this page and you will receive each blog post as it appears on our website. Feel free to call me at any time- Joe Carraher- W: 239-280-3209 or on my Cell: 239-293-7772.

Next Article »

***This article is part of a series.  If you haven’t read from the beginning please start here: WC 2.0- The Work Comp Claims Managment Program.***

Hopefully, you have read the first three blogs; if not, please go back and do so. This will be much more meaningful.

In blog 2.2, we gave a brief overview of the two major claim categories- Medical Only (MO) and Indemnity. In blog 2.3, we showed how much an indemnity claim can cost you, compared to a MO claim. Logic dictates that we should do everything in our power, within the bounds of the Work Comp law, to minimize indemnity claims. Luckily, there are tools and strategies that can do this, if you know how and when to implement them. That said, there are losses that we cannot keep from indemnity classification. The next two blog posts will make it clear what we can and can’t do.

WHAT WE CAN DO: This will revisit the three types of indemnity claims explained in blog 2.2 and explain what our system does with each.

LOST TIME- On the 8th day out of work the carrier will begin paying the injured worker (IW). They will pay 66 2/3% of their Average Weekly Wage (AWW) for as long as they are unable to work. If they are out of work for over 21 days, they will be compensated for the first 7 days as well. If ONE DOLLAR of lost time is paid, the claim becomes an indemnity claim and consequently 100% of the medical costs will be used in calculating your Experience Mod and hence, your WC premiums.

These lost time claims fall into two main categories- large claims, known as shock claims and smaller claims that last for anywhere from a few days to a couple months. The simple truth is there is nothing we can do about shock claims. If a person falls from a roof and breaks their back, they are going to be unable to work for a very long time and that is why WC insurance exists; to pay their medical bills and help them with ongoing income while they are unable to work. It is why you as an employer have insurance, as no business is prepared for a large, long term loss without the help of an insurance company. Shock claim- turn it over to the insurance carrier and be thankful they are there.

Most lost time claims, however, are NOT shock claims. They are short term out of work situations. This we frequently CAN do something about and the math is very compelling. Companies that generate $40,000+ in WC premium, it is almost always worth making an attempt at keeping a claim from going to indemnity because of lost time.

There are two ways an employer can prevent a claim from paying lost time. The best and most common way is to bring the worker back to work within those seven days. This is commonly referred to as Return to Work (RTW); I prefer the term Recover at Work and will explain why in a future post. There are many good reasons for making a serious effort as a business to make a RTW policy the default approach to any WC claim that appears to have the possibility of lasting more than 7 days, i.e., going to lost time.

The most obvious reason to embrace RTW is that it has the potential to save you a ton on money on WC premiums. But it is also a great thing for employee morale, for both the IW and other employees. Actions speak louder than words and going out of your way to take care of your employees when they are injured speaks volumes to your entire workforce. Frequently, RTW may require a part time job posting in another position or involve some physical limitation or mechanical accommodation. Large companies will do almost ANYTHING to avoid lost time claims and there are entire industries created around assisting IW’s in whatever ways necessary to continue employment during their period of recovery. Small to mid-size companies may not have those types of resources to devote to a RTW program, but they absolutely can develop intelligent, effective policies that will not only help their IW, but save them huge premium dollars over time.

The second strategy for avoiding lost time claims involves something called wage continuation. This is actually the most powerful weapon in the arsenal, but it is one that has some controversy surrounding it. Basically, Florida law allows for an employer to continue paying an injured employee in lieu of having the employee be paid by the insurance company in the formula described above. The math is clear: most times it is substantially less expensive to continue paying an employee, rather than suffer the increase in your Mod and premiums that result from an indemnity claim.

There are issues involved in this, however, and I highly recommend that anyone considering this course of action contact me directly before doing so. There are minimum amounts you must pay, different ways of handling wage continuation depending on which insurance company you are using, understanding NCCI’s stance on this and much, much more. It is a very powerful option and I am strongly in favor of using it when appropriate, but please do not utilize it without complete knowledge of the issue.

In a future blog post I will go into detail about something we call Actionable Intelligence. That is a service where we utilize the WC software programs we have to give employers a real time estimate of what a given claim could potentially cost them, based on the type of injury, the amounts reserved by the carrier and the employer’s specific premium level and loss history. This not only shows the potential cost of the claim as reserved but we do a calculation of the cost if even $1 of indemnity is paid! You will be amazed at these calculations. Furthermore, it allows owners and managers to make business decisions based on REAL NUMBERS; hence the name Actionable Intelligence.

In the next blog post we will review the other two primary causes of indemnity claims- Permanent Impairment and Settlements. The picture is not as rosy with these two types, but it is still something you need to know.

TL;DR- Takeaways- Lost Time claims are the most common type of indemnity claims. Large claims (shock claims) cannot be avoided; that is why you have insurance. Smaller claims, however, can be managed to avoid indemnity and keep them classified as Medical Only. EVERY employer who generates a Mod and significant premiums should be aware of the tools available to them to manage these claims and partner with an agency that provides this service.

Next blog post:
WC 2.5- What We Can and Can’t Do- Part Two

Please join our email list by filling out & submitting the form in the blue box on the right of this page and you will receive each blog post as it appears on our website. Feel free to call me at any time- Joe Carraher- W: 239-280-3209 or on my Cell: 239-293-7772.

Next Article »

***This article is part of a series.  If you haven’t read from the beginning please start here: WC 2.0- The Work Comp Claims Managment Program.***

This is the blog that will show you just how much indemnity losses cost you. The numbers are UNBELIEVABLE …literally. It does not seem possible that the formula is structured this way, but it is. If you do not have someone paying attention to your claims, you can pay 10’s or 100’s of thousands of dollars more than necessary in WC premiums. This blog will show you actual cases that illustrate that.

First, one quick point for you to ponder- For the majority of claims, WC insurance is not really insurance at all, rather a FINANCING MECHANISM for your losses. The exception to this is large claims, known as shock losses. When they occur, your WC coverage truly is insurance, as it protects you from catastrophic financial loss.

This article will show you the massive difference to your pocket book an indemnity claim makes versus a medical only (MO) claim. If you have not read the previous post- WC 2.2 Types of Claims- Medical Only vs. Indemnity. I highly recommend you do so before continuing.

Ok, to understand the huge discrepancy between the two types of claims, we need to understand a little history. Decades ago, there was no difference between indemnity and MO claims. But this ended up with unexpected consequences. NCCI, the National Council on Compensation Insurance (the people who gather data on every claim, develop your specific Mod and most states WC rates), found that employers were not reporting small claims. They were simply paying them directly and not reporting them to the insurance carrier. This was unacceptable to NCCI, as their primary function is to compile data on all claims and use that to produce statistically appropriate rates. The data was becoming skewed.

Their answer was to use a carrot in the form of the Experience Rating Adjustment or ERA. This adjustment has been approved by 33 states, including FL, and it states that the dollar amount of Medical only claims will be reduced by 70% when calculating your company’s Experience Mod. This means if you have a $5,000 MO claim, only $1,500 would be used in your Mod calculation…very minor impact compared to $5,000.

Now the kicker. If your claim becomes an indemnity claim, not only does the claim increase due to the indemnity payout, but 100% of the medical costs are included in your Mod calculation! Goodbye carrot, hello stick.

The best way to understand the impact of this is to see a few real world claim examples. These are cases that occurred with current clients BEFORE they moved to our agency. Our system of claims management eliminates nearly all of these type situations:

Case #1- Large AC contractor, generally has about 35-40 claims per year. Annual WC premium around $570,000 per year when these claims occurred. Here are a few claims that illustrate the above dramatically:



Indemnity Paid

$ 77



3 Yr. Increased Prem.


What is this saying? The Indemnity Paid is the actual amount the insurance company paid in Lost Time, the Medical is the actual amount paid in medical costs and the 3 Yr. Increased Premium is the amount the employer paid in INCREASED PREMIUM over the next 3 years BECAUSE it was an indemnity claim as opposed to a Medical Only claim!!! Don’t get me wrong, they will still pay a higher premium if it was a MO claim, but the medical amount would be reduced by 70%. The 3 Yr. figure shown above is the ADDITIONAL PREMIUM OVER AND ABOVE THE MEDICAL ONLY COST THEY WILL PAY. Staggering. This particular employer had at least 10 claims like this over the 2 year period prior to becoming our client that. I believe we could have saved them $243,073 in premium by utilizing our claims management system…real money in anyone’s book.

Case #2- Home Repair Service, has about 10-15 claims per year. Annual WC premium around $150,000 per year when these claims occurred.



Indemnity Paid




3 Yr. Increased Prem.


Case #3- Paving Contractor, has maybe 2-3 claims per year. Annual WC premium around $50,000 per year when these claims occurred.



Indemnity Paid




3 Yr. Increased Prem.


Case #4- Hotel, has 2-3 claims per year. Annual WC premium around $23,000 per year when these claims occurred.



Indemnity Paid




3 Yr. Increased Prem.


I show you these because they illustrate the absurd amount of money in additional premium you will pay when a claim goes to indemnity rather than staying MO. And this is true of ANY employer who generates a Mod. Obviously, the higher your premiums, the larger the impact, but that $7,809 increase for that small hotel owner was probably more hurtful than the $27,729 hit the large AC contractor experienced!

The good news is there are effective tools out there to eliminate those senseless claims that cost you thousands because a small amount of indemnity is paid out.

This is why I have developed this program. I think this method of calculating Mods is crazy, but it is the WC system as it currently exists. Crazier still, I have not met a small to medium sized employer who is aware of these rules. They simply file their claims expecting their insurance to cover it (which it does) and go on with their business, having no idea of the penalty they will incur or the fact that there are ways they could have prevented it.

I have become an evangelist about this because I believe EVERY employer in Florida who develops a Mod should be aware of this and what they can do to protect themselves.

There is MUCH more to learn on this topic and I will be posting another 40 or so blogs on the topic, but if you see the value of what I am saying please call me at 239-280-3209 or my cell at 239-293-7772. Or email me at and I will be happy to explain all of this and more In greater detail.

TL;DR Takeaways- Indemnity claims cost you dramatically more than MO claims. The math is unbelievably unfair in many cases. There are tools you can use to avoid getting pummeled by this system. I believe every employer should know about this and be able to manage their claims accordingly.

Next blog post:
WC 2.4- What We Can and Can’t Do- Part One

Please join our email list by filling out & submitting the form in the blue box on the right of this page and you will receive each blog post as it appears on our website. Feel free to call me at any time- Joe Carraher- W: 239-280-3209 or on my Cell: 239-293-7772.

Next Article »