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Minimizing claims cost makes good business sense

But what happens if an employee becomes injured at the workplace, and if that worker has an underlying or pre-existing condition that either caused the injury or prolongs their recovery? Should the employer bear the full cost of that claim?

The answer, in many jurisdictions, is “no.” Many provincial compensation boards across the country, including British Columbia, Alberta, Manitoba, Saskatchewan and Ontario, offer cost relief to employers where a workplace injury aggravates a pre-existing condition, causes the injury or prolongs the period of recovery. The rationale behind this is that the pre-existing conditions are non-compensable and should not form part of the overall claim costs. Removing some or all of the costs benefits the employer by decreasing the overall impact of the claim on their experience rating.

In many cases, the pre-existing condition may be underlying and the person may not have any symptoms. For example, in the case of degenerative disc disease in a person’s back, a person may not have any pain or symptoms prior to an injury. However, an injury to the back may be enhanced because of the underlying condition, and the period of recovery may be longer than for a person without the degenerative disc disease.

Cost relief may be applied differently in each jurisdiction. British Columbia and Ontario apply the cost relief directly to the costs of the claim, while Nova Scotia will apportion the costs of the claim based on a rating of non-compensable factors that may be affecting the worker, while determining what “extended benefits” are payable. 

The net result for the employer is the same: a decrease in claim costs and a positive effect on their experience rating. However, these different regimes may impact the amount of benefits payable to a worker. While the practices in BC and Ontario do not impact the amount a worker receives, practices like those in Nova Scotia may impact the monies the worker receives should they have long term or permanent impairment.

Although some jurisdictions require their case managers to proactively review claims for evidence of a pre-existing condition, and apply cost relief on a proactive basis, it is recommended that employers take it upon themselves to request cost relief, if it is available in your jurisdiction. 

As an employer, you may be aware of information that may provide evidence of a pre-existing condition, such as a prior claim to the same area of the body, prior complaints by the worker, or knowledge of prior medical attention, treatment or surgery to the affected area of the body. This information may be important to the compensation board when assessing whether cost relief is in order, and the amount that will be applied. Since claim cost and claim duration are often two of the most important factors used to calculate an employer’s experience rating, minimizing claim costs just makes sense.

David Marchione

David Marchione is an occupational health and safety consultant and paralegal at Fasken Martineau DuMoulin in Toronto. He can be reached at (416) 868-3468 or dmarchione@fasken.com, or visit www.ehslaw.ca for more information.
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