ABOUT... THE FLOAT
Here's how it Works
- Delay tactics: Insurance companies employ various delay tactics to prolong the claims process, such as requesting unnecessary medical records, scheduling unnecessary appointments, or disputing the validity of the injury. This can lead to months or even years of limbo for injured workers who are desperately waiting for their benefits.
- Financial pressure: By delaying payments, the insurance company’s aim is to put financial pressure on the injured worker where it can cause a variety of devastating issues including homelessness. This typically forces the injured worker to accept a lower settlement offer or even abandon their claim altogether, ultimately saving the insurance company thousands even millions of dollars to pay on just one claim.
In the Work Comp System
- Investment opportunity: While the injured worker struggles financially, the insurance company retains access to the money that would have been paid as benefits. They typically invest this money and earn interest, further increasing their profits.
The term “float” refers to the amount of money that the insurance company holds onto during the delay period. The longer the delay, the larger the float becomes and the greater the potential profit for the carrier.
Playing the Float is a controversial practice as it can have a devastating impact on injured workers. They may struggle to pay for medical bills, rent, and other basic necessities while waiting for their benefits. Furthermore, the uncertainty and stress associated with the delay can negatively impact their physical and mental health.
While the practice is not illegal, it has been criticized by worker advocates, lawmakers, and even some insurance industry professionals. Some states have implemented regulations to limit the use of delay tactics and expedite the claims process.
It’s important to note that not all workers’ compensation claims are subject to Playing the Float. Some claims are quickly approved, and benefits are paid promptly. However, the practice remains a concern for many injured workers and advocates are working to ensure that everyone has access to the benefits they deserve.