Steps in a Well-Designed Plan
The Maxco story concludes with these last three steps. In future blogs we will explore in more detail and depth some of the internal and externals tools, forms, and practices Maxco implemented to make their workers’ compensation cost cutting effort so successful across all divisions.
Safety Management No workers’ compensation cost control program is complete without an effective loss control program and an in-plant safety program. While MaxCo has a good loss control program, it also realizes there will still be claims from time to time, and each division has to be prepared to properly manage these inevitable claims.
MaxCo utilizes the services of its insurance broker’s loss control subsidiary and has loss control inspections at every facility several times a year. Home office personnel follow up on these audits and spend time with the division personnel reviewing workers’ compensation claims and safety procedures. Each division is encouraged to have an active safety committee, a workers’ compensation coordinator, and an incentive program to reward safe performance. In some states, a safety committee and other safety loss control activities are mandatory.
Performance Goals. The results of MaxCo’s program are measured in three ways: severity rate, return-to-work ratio and cost per employee, with goals as follows:
- The severity rates should be below 40-100, depending on the industry groups.
- Return-to-Work ratio: 70 percent to 90 percent of injured workers should return to work within 10 days after an accident.
- The cost per employee should be below $300.00 or half the industry average. Industry averages are based on
2009 RIMS Benchmarking Survey.
One of the most effective tools to use is a list ranking all of the divisions by how well they are doing on their workers’ compensation costs compared to all other divisions. Know as a “Best to Worst” list, it’s an effective tool because no division wants to have the worst record and it creates peer pressure to improve the rankings. (A sample of the “Best to Worst” list can be found on the website.)
Workers’ Compensation Helpline” Of vital importance to the success of the program is the continued assistance and monitoring from the corporate office, know by MaxCo as its workers’ compensation “Helpline.” MaxCo reviews the insurance division’s loss runs and claims reports on an ongoing basis and contacts each division periodically to discuss strategy for resolving each claim. MaxCo also is available to its divisions when they have questions about the claim strategy being using.
MaxCo wants to ensure each division becomes familiar with using a variety of claim resolution strategies. There are many “roadblocks” which can occur in each claim, and each division needs to understand the process of how to eliminate these “roadblocks.” Author: Robert Elliott, J.D.
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WC Calculator www.ReduceYourWorkersComp.com/calculator.php
TD Calculator www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php
WC 101 www.ReduceYourWorkersComp.com/workers_comp.php
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.
