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ATLANTA-Employers can and do terminate problem workers compensation claimants, but doing so requires precautions to prevent litigation losses.

Those same precautions can help employers from running afoul of the Family Medical Leave Act and the Americans with Disabilities Act, according to three speakers on a panel at the Risk & Insurance Management Society Inc. last week.

The best policy is to take care of good employees, the panelists agreed. But employers do need to rid their payrolls of workers who chronically abuse the system, yet continue to unfairly take advantage of benefits such as vacation pay and pension credits.

Risk managers need to consult their local laws because each state has its own peculiarities and some prohibit termination while an employee is on workers comp. In addition, most states clearly prohibit an employer from firing an employee just because he or she files a claim.

However, there are some just and legal reasons for firing the abusive claimant, the panelists said.

In all cases, creating a written policy on terminating employees for absenteeism, is one of the best safeguards for employers, they said.

Such a policy can also help employers document that they have met a Family Medical Leave Act requirement that employees receive notification of company guidelines on missed days and specifically when a company starts counting those days.

Still. a limited number of companies have such policies. The three panelists learned more about that when they informally surveyed many risk managers each of them knows personally. Such a survey is not scientific, but it does shed light on the practices at companies in a wide range of industries, said James C. McNamara, cost containment manager/corporate risk manager for Aramark Corp. in Phila-delphia.

Virtually all of the companies with 200 to 1,000 employees surveyed by the panelists do not have a leave of absence policy addressing the termination of abusive workers comp claimants, said Mr. McNamara, who moderated the session.

In comparison, about 50% of companies with more than 5,000 employees do have such a policy and those that have a policy believe it helps them avoid lawsuits, he added. Additionally, about 80% of those larger employers do terminate employees who have a current work comp claim pending in certain problem situations.

The three safest reasons for an employer to fire problem claimants are for performance issues, exceeding the limit of allowable absent days, or exceeding a leave of absence policy time-off limit, said Sandra Jenson, special projects manager for Near North Insurance Brokerage Inc. in Chicago.

Therefore, a written policy needs to state exactly what action, such as termination, a company will take after the employee misses a certain number of days. The employers polled by the speakers found their policies to be most successful if they set the amount of allowable time away from work between 90 days and 24 months.

"What we found is some of the risk managers we talked to that had 12 month and 24 month policies found there seemed to be a miraculous recovery after they would notify people right before that 12 or 24 month period expired," Ms. Jenson said.

An employer's policy needs to allow enough time away from work so that good employees with real problems have time to heal and they are not pressured to return to work before they are honestly ready.

To do that an employer creating a policy should weigh the severity of claims they typically generate. An employer with a consistent amount of high severity claims will likely not want to set the number of allowable missed days at 90, Ms. Jenson explained.

Also, employers creating a new policy need to include a grace period for workers who are already exceeding or nearing the limit so they don't rush to an attorney.

Likewise, a policy should call for giving absent employees two weeks to 30 days notice before they are terminated so workers don't find out through other channels, such as learning that their insurance is no longer valid when they go to visit a doctor.

The policy should exclude missed time for jury duty, military duty and any other state-required time off. It must also be carried out in a non-discriminatory manner.

One of the most important steps an employer can take to prevent conflicts between such a policy toward workers comp claimants and the Americans with Disabilities Act, which requires reasonable accommodation for workers with disabilities, is to create a formal "intake" procedure for employees returning to work after a work comp injury, said Frances J. Skinner-Lewis, an attorney for the firm of Johnson & Bell in Chicago.

The procedure should require an analysis to determine whether or not the employer is dealing with someone who really meets the disability requirements of the ADA. Employers should not automatically honor their request for ADA status, she said.

The paper file from such an analysis provides the employer with defense documentation should that be necessary. It also serves another purpose.

Too often employers mistakenly assume the returning employee is disabled, without verifying it with ADA guidelines, Ms. Skinner-Lewis said. As a result, employers actually legitimize the alleged disability and then they are bound to provide the employee with ADA entitlements, she said.

The session was coordinated by Elizabeth Simer, vp of national accounts for Near North National Group in Chicago.