Deductibles and co-insurance
Sec. 5.5. (a) Each insurer entering into or issuing an insurance
policy under IC 22-3-2 through IC 22-3-7 may, as a part of the policy
or as an optional endorsement to the policy, offer deductibles or
co-insurance, or both, that are optional to the insured for benefits
under IC 22-3-2 through IC 22-3-7. Each insurer may do the
following:
(1) Offer deductibles in multiples of five hundred dollars
($500), up to a maximum of five thousand dollars ($5,000) per
compensable claim.
(2) Offer co-insurance for each compensable claim. The
following apply to co-insurance provided under this
subdivision:
(A) The co-insurance must require the insurer to pay eighty
percent (80%) and the insured to pay twenty percent (20%)
of the amount of benefits due to an employee for an injury
compensable under IC 22-3-2 through IC 22-3-7.
(B) An insured employer may not be required to pay more
than four thousand two hundred dollars ($4,200) in
co-insurance under this subdivision for each compensable
claim.
(b) An insurer shall fully disclose in writing to prospective
policyholders the deductibles and co-insurance offered under
subsection (a). An insured employer who chooses a deductible under
subsection (a):
(1) may choose only one (1) deductible amount; and
(2) is liable for the amount of the deductible for benefits paid
for each compensable claim of an employee under IC 22-3-2
through IC 22-3-7.
(c) An insurer shall do the following:
(1) Where a policy provides for a deductible, the insurer shall:
(A) pay all or a part of the deductible amount, whichever is
applicable to a compensable claim, to the person or medical
provider entitled to the benefits under IC 22-3-2 through
IC 22-3-7; and
(B) seek reimbursement from the employer from the
applicable deductible.
(2) Where a policy provides a deductible or co-insurance, the
insurance company shall pay the full cost of the claim. The
insurance company shall seek reimbursement from the insured
employer for its portion of the liability following closing of the
claim or when twenty percent (20%) of the benefits paid exceed
four thousand two hundred dollars ($4,200).
(d) The payment or nonpayment of a deductible or co-insurance
amount by an insured employer to the insurer shall be treated under
the policy insuring the liability for worker's compensation in the
same manner as payment or nonpayment of premiums is treated.
(e) The premium reduction for deductibles or for co-insurance
shall be determined before the application of any experience
modifications, premium surcharges, or premium discounts. The
applicable premium reduction percentage is the percentage
corresponding to the appropriate deductible or co-insurance amount.
The premium reduction is obtained by the application of the
appropriate reduction percentage, shown under miscellaneous values
in the rate pages, to the premium determined before application of
any experience or schedule modification, premium discounts, or any
retrospective rating plan.
(f) This section does not apply to the following:
(1) An employer that is authorized to self-insure against liability
for claims under IC 22-3-2 through IC 22-3-6.
(2) Group self-insurance funds for claims under IC 22-3-2
through IC 22-3-6.
(g) A deductible or co-insurance provided under this section
applies against the total of all benefits paid for a compensable claim,
including benefits paid under the following:
(1) IC 22-3-3-4.
(2) IC 22-3-3-8 through IC 22-3-3-10.
(3) IC 22-3-3-17.
(4) IC 22-3-3-22.
(h) An employer may not use the employer's election of a
deductible or co-insurance under this section or the payment of a
deductible or co-insurance under this section in negotiating with the
employer's employees on any terms of employment. An employee of
an employer that knowingly violates this subsection may file a
complaint with the department of labor. The department of labor may
impose a civil penalty of not more than one thousand dollars
($1,000) against an employer that knowingly violates this subsection.
(i) This subsection applies to an employee of an employer that has
paid a deductible or co-insurance under this section and to the
employee's dependents. If an employee or a dependent recovers
damages against a third party under IC 22-3-2-13, the insurer shall
provide reimbursement to the insured equal to a pro-rata share of the
net recovery by the insurer.
As added by P.L.170-1991, SEC.15.
Last modified: May 27, 2006