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10 Costly Mistakes Employers Make in Controlling Workers Compensation Insurance

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Amaxx Risk Solutions is always looking for ways to assist employers and to prevent the mistakes that cost the employer money. Unfortunately, we see some of the same mistakes repeatedly.  Here are the top 10 mistakes that employers make when it comes to controlling the cost of their workers' compensation insurance.
 

1.      The failure to provide the employees with a safe work environment. The lack of a strong Safety Program is the #1 reason many employers are saddle with high   workers' compensation premiums. 

Employers who:

a.  utilize safety training,

b.  have completed a job hazard anaysis on every job position within the company,

c.  complete work-site evaluations and inspections, and

d.  have a safety specialist and/or a safety committee with significantly fewer on-the-job injuries, resulting in lower workers compensation cost. (WCxKit)

 

2.      The lack of an established Return to Work Program is the probably the second most expensive mistake an employer can make. The longer the employee is allowed to remain off work and drawing indemnity benefits, the higher the cost of the claim and the higher the resulting workers' compensation premiums will be. By returning the employee to modified duty or light duty work until the employee is able to resume his regular duties, the employer receives the benefit of some production from the employee. Also, light duty work will speed the employee's recovery and lower the extent of any permanent disability rating, resulting a lower disability award.

 
3.      The alienation of the employee after an injury is a major mistake made by employers. Way too many employers simply forget about the employee once they have reported the injury to the claims office. Everyone has a certain amount of need for reassurance of their value to the company. If the employee never hears from the employer after the accident, they tend to think the worst. Employees who have regular contact from the employer after an accident seldom become adversarial and hire an attorney. By keeping the lines of communication open with the employee after an accident, the employee recognizes the employer is concerned about their well being.
 
 
4.      A mistake an employer should never make, but occurs too frequently, is the failure to timely report a workers' compensation injury to the claims office. An employer who saves up all their work comp claims for the week to report to the claims office each Friday is being penny wise with their time and pound foolish with their money. Every department supervisor within your company should know that as soon as they have arrange transport of the injured employee to a medical facility, the next step before they do anything else is to report the claims to the company's workers' compensation claims coordinator, or to report the claim direct to the claims office. The sooner the claim is reported, the faster the adjuster can start the claim investigation, and provide the required benefits to the employee, if appropriate.
 

 5.      A hands off approach to your workers' compensation claims will result in higher insurance cost. The employer should make the employee's supervisor available to the adjuster to discuss the details of the accident and assist the adjuster with the investigation in any way needed. The smart employer will not only stay in contact with the employee after an injury, the smart employer will also stay in contact with the work comp adjuster. The employer should convey to the adjuster all information about the work comp claim that is given to them by the employee. While some of the information will be duplication of what the adjuster may have already obtain, there will be information that will assist in the processing of the claim.


6.      The failure to manage and control what happens before and when a claim happens is a mistake many employers make. All supervisors should be trained on what to do when a claim happens. All employees should be provided a brochure, both when they are hired and annually, with a written guide on what the employee should do when an accident occurs. The injury procedure policy should be posted where all employees can see it. All state required notices, OSHA notices, required (or suggested) medical providers and fraud prevention posters should be posted.


7.      A costly mistake some employers make is not controlling the selection of the medical provider in the states where the employer can do so. If the state allows the employer to select the medical provider, the approved medical facilities should be posted where every employee will know who they are in the case of an accident. In the states where the employee is allowed to select the medical provider, the employer should post a list of suggested medical providers. More often then not, in a non-emergency situation, the employee will select from the suggested list of medical providers, especially if the employer has managed and controlled the work comp claim process (see # 6 above).

 
8.      The lack of a drug testing policy is a crucial mistake make by some employers. The employers who take the position that drug testing is an invasion of the employee's privacy pay for their political correctness. A pre-hire drug testing policy, combined with random drug testing and drug testing of all employees who are injured on the job, will reduce the number of injuries and identify the employees whose injuries are the result of their drug use.


9.      According to the National Insurance Crime Bureau, up to 25% of all workers' compensation claims have some element of fraud. The failure to fight fraud can be a costly mistake for the employer. Every employer should have a fraud prevention program and know the red flags (indicators) of potential employee fraud. All employers should make it clear that workers' compensation fraud is a crime and will be fully prosecuted. Plus all employees should know that work comp fraud takes money away from their raises and/or bonuses.  (WCxKit)
    

10. An incomplete medical management program will definitely add to the cost of  workers' compensation. Every employer should make sure their workers' compensation insurer, or self-insured program uses all the medical cost reduction techniques available   including medical fee schedules, bill reviews, nurse case, utilization review, pharmacy benefit managers and medical provider management networks. By utilizing all available medical cost management techniques, the overall cost of workers' compensation can be lowered.   

 

Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing.
Contact:  RShafer@ReduceYourWorkersComp.com or 860-553-6604.
 
WORK COMP CALCULATOR:   http://www.LowerWC.com/calculator.php
MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php
 
WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 

©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

This entry was posted on Sunday, December 12th, 2010 at 7:02 pm and is filed under Implementation and Rolling Out Your Program, Return to Work and Transitional Duty, WC 101. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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