Term

Definition

paid loss retrospective rating plan (paid loss retro)

retrospective rating plan that uses only paid losses (not outstanding reserves) to calculate premium owed

Part One coverage

another name for the section of the WC policy that covers the benefits an employer is required to provide by state law

Part Two coverage

another name for the employer's liability coverage found in Part Two of the standard WC policy

Part Three coverage

another name for the section of the WC policy that covers other states insurance

partners

multiple owners of a business that is not organized as a corporation or limited liability company (LLC) -  members of a partnership are not automatically eligible for WC benefits

Partners, Officers and Others Exclusion Endorsement

Exclusion endorsement used in states where partners and officers have a choice of whether to be covered by WC or not

“pay promptly when due the benefits required by law”

The most fundamental promise made in the WC policy

payments "without prejudice"

Paying WC benefits while compensability is still in question (this allows for prompt payments that do not commit the employer to accept the whole claim)

payroll

the amount of wages an employer pays within a specified period of time

payroll audit

examination of the employer's payroll records by a representative of the insurer (usually called a premium auditor) to determine the final premium due on a policy

peculiar risk doctrine

extension of a line of court decisions involving independent contractors that sometimes affects WC benefits to the employee of a contractor; not supported by most courts

penalty

additional amount a WC insurer or claim administrator must pay, usually for a delay or incorrect action; some penalties are payable to injured workers or medical providers and some are paid to state WC agencies

pension plan offset

some pension plans will reduce payments to the extent that the recipient continues to receive WC benefits

permanent and stationary (P&S)

older term indicating an injured worker is at maximum medical improvement (MMI)

permanent disability (PD)

condition where the worker's earning capacity is impaired for life

permanent impairment

condition where the worker’s level of physical function cannot return to its pre-injury level

permanent impairment rating (PIR)

a key component of a permanent disability rating; PD also incorporates loss of earning factors

permanent partial disability (PPD)

condition where the worker's earning capacity is impaired for life, but he or she is still able to work

permanent total disability (PTD)

condition where the worker is not able to work at any paid employment for his or her remaining lifetime

personal comfort doctrine

for WC, the evolution of a line of cases questioning compensability of injuries during restroom breaks, while getting a drink, eating lunch, or going to get one’s paycheck-- as a general rule, where such activities are reasonable, they are covered

personal deviation

for WC, the worker's decision to engage in non-work activity during the course of employment, thus creating a compensability issue

personal risk

same as street risk

petition for review

written request for a higher level of the WC regulator to review a lower-level award or decision

physical rehabilitation

same as physical therapy

physical therapy (PT)

also known as physical rehabilitation: administration of tests of bodily function; setting of short and long-term therapeutic goals; developing and implement of exercises and activities leading to the highest level of independence; measurement of progress; and discharge planning

physical-mental injury

physical injury that results in an accompanying psychological injury

physician panel

group of medical providers listed in a state-specified format so that injured workers can choose from the list

Physicians Current Procedural Terminology (CPT codes)

widely used system for identifying outpatient medical services

piece work

work where the worker's pay is based on the number of units of work produced rather than an hourly, daily, weekly, or monthly wage

policy

see insurance policy

policy expiration

the ending date for insurance coverage

policy inception

the starting date for insurance coverage

policy period

the period of time covered by an insurance policy

policy term

same as policy period

policyholder

person or entity insured by an insurance policy; for WC, this is typically the employer

“Pool, The”

see residual market plan

pooling, pools

in some states, employers too small to individually self-insure can combine their loss exposure in a plan where they share premiums, losses, and costs

positional risk doctrine, positional risk theory

general principle, held to in some states, that any injury occurring at the work location is work-related, even if the risk to the general public was the same (e.g., tornado) -- opposite of increased risk doctrine

posting notice

older name for notice to employees

precertification

for WC, pre-approval of a medical procedure by the claim administrator or its medical review organization

preexisting condition, aggravation of

injury to a body part that was already injured or weakened prior to this work injury

preferred provider organization (PPO)

employer's medical care plan for the treatment of its employee's work-related injuries and diseases -- PPOs emphasize quality control, treatment guidelines, and cost-effectiveness

pre-injury waiver

see waiver, pre-injury

premium

for WC, the price paid for insurance coverage for a fixed period of time, such as one year

premium allocation system

any method an employer uses to allocate WC premiums (or losses) across its operating units; believed to encourage line managers to pay more attention to WC loss control

premium auditor

determines actual exposure (remuneration) for a policy period to calculate the final audited premium – the premium auditor typically works either directly for the insurance company or for a third-party company hired by the insurance company

premium differential

a residual market program often includes a premium differential from the voluntary market

premium discount

reduction in premium based on size of the premium paid, normally given automatically on voluntary market policies, although retrospective rating or sliding scale dividend policies usually do not have a premium discount

Premium Discount Endorsement

endorsement to the WC policy that explains premium discount percentages

premium fraud

for WC, the deliberate misclassification of jobs or underreporting of payroll to fraudulently reduce premium

premium taxes

taxes the insurer owes to the state based on premium; in most cases, losses within a large deductible plan are not considered premium

present-day value

same as present value

present value

value today of a future payment, or stream of payments, discounted at some appropriate interest rate

presumption, conclusive

legal advantage that cannot be overcome by stronger proof; for example, a worker who loses both arms at one time is conclusively presumed to be permanently and totally disabled

presumption, rebuttable

legal advantage that is not absolute and can be overcome by stronger proof; for example, most presumptions of compensability are rebuttable

presumption of compensability

legal advantage in proving that the WC Act covers an injury or disease; for example, some cancers of firefighters are presumed compensable in some states, but it is a rebuttable presumption

pre-unit-stat review

a review of open claims to confirm that they should remain open and that their reserves are appropriate; timed to generate an accurate unit statistical report and thus an accurate experience modification factor as of the valuation date

primary losses

in the experience modification factor, the first $5000 of any one loss

product liability suit

for WC, a lawsuit brought by the injured worker against a third party such as the manufacturer, distributor, or retailer of a product that allegedly caused the injury or disease – these suits create the possibility of subrogation for the WC payer

promissory note

for WC, a financial guarantee that allows an insurer to book the entire premium even though only a portion of it has been received

prosthetic device

assistive medical device, often attached to the injured worker's body

proximate cause

major cause of an accident or injury

public employment

generally, any paid job working for a governmental unit

punitive damages

money damages awarded in a lawsuit to punish and deter very bad behavior; these damages are not available as a state WC benefit and are not covered by Part Two employers liability coverage

pure front

see fronting arrangement

pure loss ratio

a ratio of losses to premium that does not include the insurer’s expenses to underwrite the policy or administer the claims