8780 WORKERS' COMPENSATION CLAIMS, LEGALLY UNINSURED AGENCIES
8780 GENERAL
(Revised 4/92)
The State Compensation Insurance Fund (SCIF) will pay all claims for medical expenses and compensation benefits in the first instance. Legally uninsured agencies (all agencies not covered with policies of workers' compensation insurance) then will be billed for the benefits paid plus a charge for administrative services of SCIF. The latter charges are allowed under a master agreement for all legally uninsured agencies negotiated by the Department of Personnel Administration and SCIF. These bills are payable by legally uninsured agencies from the fund or funds from which the injured or deceased employee's salary or wages were payable at the time of injury or death. In case of agencies operating under plans of financial adjustment, "fund or funds" above means the fund or funds from which the employee's salary or wages were ultimately payable, as adjusted through the plan of financial adjustment.
The master agreement mentioned above also provides that each legally uninsured agency place a deposit with SCIF. These deposits, which are approximately 1/12 of an agency's estimated annual cost, will be used by SCIF to pay claims as they arise. The deposits will remain in SCIF's possession and will be adjusted up or down each April 1, when the amount needed to maintain the estimated 1/12 figure has changed by ten percent, plus or minus. A memorandum will be sent to all agencies by DPA each year informing them of the changes and how they are to account for the monies. It is important that these desposts, as well as the normal semi-monthly billings, be paid immediately, as explained in SAM Section 8780.1.
8780.1 PAYMENT AND AUDIT
(Revised 4/92)
The State Compensation Insurance Fund (SCIF) will bill agencies semimonthly. The Agency Payroll Code (from the Uniform State Payroll Code System), indicated on the Employer's Report of Occupational Injury or Illness, SCIF Form 3067, is used by SCIF to sort charges mechanically by the legally uninsured agency concerned. Because of this procedure, it is important that the correct agency code be shown on the SCIF Form 3067. The Agency Payroll Code is also shown on invoices submitted to agencies and will enable them to distribute the Workers' Compensation charges among subunits as needed.
It is imperative that Workers' Compensation invoices be paid immediately. The major reason being that any amount outstanding after 35 calendar days from the postmark date on the envelope containing SCIF's bill is subject to an interest charge. The interest rate used will be the same as the annualized Pooled Money Investment Account (PMIA) promulgated at the end of each fiscal year by the Director of the Department of Finance. Agencies will schedule the invoices and file a separate claim schedule against the Personal Services Category with the State Controller's Office the same day the invoices are received. Such claim schedules will receive expedited processing by the State Controllers' Office. The notation "Expedite—Workers' Compensation" will be shown on the claim schedules in a conspicuous place.
8780.1 PAYMENT AND AUDIT
(Revised 4/92)
To expedite payment, Workers' Compensation Invoices ordinarily will be paid first and audited by the agency later. The agency audit of Workers' Compensation invoices will consist only of determining (1) that all employees listed on the invoices were employees of the agency at the time of injury or death and (2) that the employee is not covered by a separate policy of insurance (for those agencies that have some employees covered by a separate policy and others by the master agreement). Except as noted below, agencies will pay the full amount of the invoices as submitted and will report any discrepancies promptly to SCIF. SCIF will make the necessary adjustments on subsequent invoices.
However, when an agency performs a cursory review of a Workers' Compensation invoice the same day that the invoice is received and determines that there is definitely a discrepancy, it may make the necessary adjustment and notify SCIF by use of STD. 107, Notice of Correction of Invoice. Agencies should be cautious in using this procedure since many charges that appear to be in error are actually valid charges.
8780.2 INSUFFICIENT ALLOTMENTS
(Revised 2/83)
Because of the nature of Workers' Compensation expenses for legally uninsured agencies, some agencies may experience much greater expenditures than estimated and quickly expend their entire allotments. It will be the agencies' responsibility to manage their allotments and determine the financing available to fund the Workers' Compensation expenses for the entire fiscal year. The Department of Finance will be advised as soon as possible when it becomes apparent that additional financing is going to be required. Allotment transfers, revisions, and augmentations will be arranged in the usual manner.
The depletion of the allotment must not delay the payment of Workers' Compensation invoices. This may mean that allotments are temporarily overexpended until additional financing is arranged. Suitable financing will be arranged, however, so that at the end of the year, final allotments, as approved by the Department of Finance, are not overexpended.
