13 Workers’ Compensation Acronyms Every Small Business Owner Should Know
Every industry has its own language which includes acronyms sometimes only insiders understand. There are plenty of insurance terms and workers’ compensation acronyms that may not make sense to small business owners, but are important to know and understand. For example, they should know which workers are entitled to TPD after getting TTD and the difference between PPD and PTD.
Here is a glossary of basic workers’ compensation acronyms and terminology to help make sense of it all:
- AWW/ADW – Average Weekly Wage/Average Daily Wage is the amount of money an employee earns, on average, on a weekly or daily basis from their employer. These are the two ways in which an injured worker’s earnings are calculated. These earnings are then used as the basis for how much an injured worker will receive for wage loss benefits. In most instances, it is an employee’s weekly wage that is used to calculate loss wage benefits. In most states, wage loss benefits amount to approximately two thirds of an employee’s average earnings, subject to state maximums.
- IME – Independent Medical Evaluation, Independent Medical Examination, and Independent Medical Examiner are three interrelated terms that refer to a medical examination and evaluation, which is performed by a medical provider who has not previously been involved in the workers’ compensation case. The purpose of an independent medical examination and evaluation may be to determine the cause, extent and treatment of a work-related injury where liability is at issue, whether an injured worker has reached maximum medical improvement and whether any permanent impairment remains after treatment.
- IR – Impairment Rating. Once an injured employee has reached maximum medical improvement (see below), the evaluating doctor will examine the injured employee and decide whether he or she has a permanent impairment. If permanent impairment exists, the doctor assigns an impairment rating – usually stated as a percentage – to the permanent disability. For example, a doctor may give an injured employee a 50% impairment rating as to the right arm.
- MMI – Maximum Medical Improvement. A doctor finds that an injured employee has reached maximum medical improvement when his or her condition has improved as much as it is going to with treatment. At this point, the injured employee is examined by the doctor to determine whether he or she is permanently impaired.
- PBM – Some insurance providers contract with third-party Pharmacy Benefits Managers to oversee and administer the prescription drug component of a workers’ compensation claim. A pharmacy benefits manager can verify that injured employees receive appropriate and cost-effective care that can help them recover and return to work.
- PPD – Permanent Partial Disability benefits are paid to employees who have a lasting impairment that may impact their future earning capacity. ; This includes individuals who are only capable of returning to modified or alternate work.
- PTD – Permanent Total Disability Permanent total disability (PTD) benefits are paid to an employee who is completely and permanently unable to work.
- SSDI – Social Security Disability Insurance benefits are payable to disabled individuals through the Social Security Administration. Many state workers’ compensation statutes have specific provisions that dictate whether an injured employee may receive both workers’ compensation benefits and SSDI benefits at the same time. Generally, if both benefits are appropriate for the same individual, a complex calculation will be performed to “offset” the benefits so the individual does not receive more money than they are entitled to have from both programs.
- TPD – Temporary Partial Disability benefits are payable when an injured employee can work despite an injury, although at reduced earnings.
- TTD – Temporary Total Disability benefits are available to employees whose injuries render them unable to perform any type of work, including light duty or alternative work.
- OT/PT – Many injured employees are entitled to receive Occupational Therapy or Physical Therapy as a form of medical treatment to recover from work-related injuries.
- VR – Vocational Rehabilitation, or “occupational rehabilitation,” generally includes a variety of services offered to injured employees to help them return to work following a work injury. Vocational rehabilitation may involve transferable skills assessments, educational courses, job search assistance and other vocational aids.
- X-MOD – The Experience Modification factor is used to help determine the premium a policyholder will pay. It uses the employer’s past experience to project future losses and provides added incentives for loss reduction. The XMOD varies according to payroll and generally assumes that businesses with larger workforces are likely to incur more costs due to work-related injuries or illnesses.
For more information on workers’ compensation acronyms and terminology, contact EMPLOYERS.