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March 18, 2009
There is good news for employers: their workers’ compensation premium is one of the most manageable insurance costs they face, due to the direct relationship between the claims an employer incurs and the cost of their insurance. Preventing injuries and mitigating the cost of the claims that do occur can dramatically reduce an employers’ cost of workers’ compensation insurance.
There are eight components of an effective workers’ compensation program that can reduce these costs:
Preventing injuries from occurring in the first place is the best way to reduce workers’ compensation costs. Many employers implement safety campaigns once they realize they need to reduce injuries. Unfortunately, these campaigns usually run their course, and later the pressures of production or other organizational priorities put safety on a back burner. The employers who are committed to preventing injuries find unique ways to integrate safety into their value system and culture. Safety is not just a priority for these employers; it is who they are.
Hiring the right people for the job may seem obvious, but many employers don’t consider workers’ compensation when interviewing and considering potential new employees. Employers with high workers’ compensation costs are often frustrated with a handful of employees who have more than their share of claims, or who seem to be working the system and increasing the cost of the claims. Implementing proactive hiring practices that focus on safety conscious employees can reduce this frustration and the additional costs associated with these claims.
Unfortunately, implementing proactive hiring practices may not be enough to thoroughly identify employees who are not capable of performing the physical requirements of their job. Appropriate screening, such as pre-placement physicals, may be necessary to ensure the employee can safely perform their duties and not risk harm to themselves or co-workers.
Supervisors have many managerial responsibilities, but employers who are effective at controlling their workers’ compensation costs push the program’s management responsibilities down to the lowest level of supervision. These front-line supervisors are in the best position to ensure a safe workplace and have the closest relationship with the employees.
When an accident does occur, it is important to investigate and document the incident thoroughly to ensure the legitimacy of the claim, determine the causal factors, and learn how the injury may have been avoided. Sharing information within the organization about how the injury occurred and how it could have been prevented is critical to avoid similar injuries in the future, thus reducing costs. Again, the front-line supervisor should be directly involved and report accident investigation finding(s) back to management and the safety committee.
Establishing a working relationship with a local medical provider can play an important role in controlling the medical cost of claims and getting injured workers back to work quickly. Most states limit the control employers have over who treats an employee, but having a local medical provider who knows the employer’s operations and transition duty program treat an injured employee can eliminate time loss costs on many claims, while ensuring the employee is getting the medical treatment they need.
More important than any other factor is having an effective transitional duty, or light duty program in place to reduce an employer’s workers’ compensation costs. The longer an employee is off work due to an injury, the harder it is to get them back to work and the higher the claim costs. Having an effective transitional duty program can eliminate time loss costs on many claims and/or significantly reduce these costs.
Finally, knowing if your workers’ compensation program is working or not requires effectively monitoring the results. Reviewing accident investigation reports, claim trends, and the status of open claims allows management to monitor the results and modify programs as necessary to address issues.
For more information about reducing your workers’ compensation costs, please contact Marty Bask or a Parker, Smith & Feek Account Executive.
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.