Can you answer this?
Question: What are the three sources driving your workers’ comp costs UP or down?
Answer: State Rates, Experience Mods and, YOU, the employer.
Are you surprised to learn you are one of them? True, your state and your insurer are the primary cost drivers and the rates and premiums may be etched in stone, but the employer (or the broker) can do many things to wrangle a bigger, better deal for yourself and your company. It’s no secret. The 2009 RIMS Benchmark Survey WC Best Practices indicated that companies with brokers (both commercially insured and self-insured) have better best practice rankings than those without brokers.
1. State Rates
Each state determines rates by classifications for job functions. Obviously, roofers are rated higher rate than computer analysts because the risk is greater. Roofers who stand back to admire their work have a much higher probability of falling off the roof than computer analysts have of falling off their chairs.
Obtain the state classifications from the National Council on Compensation Insurance (NCCI), your state workers’ comp commission or department and make sure your employees’ job functions are classified correctly. http //reduceyourworkerscomp.com/resources.php
2. The Experience Mods and the insurance company
The experience mod is a powerful number and you must pay attention to it. Experience mods are factored in by insurers after determining where you stand with respect to frequency and severity of work related injuries. Employers with a history of frequent and severe work related injuries factor in at a much higher experience mod than those with less eventful histories. A mod of 1.0 or less – GOOD; more than 1.0 — BAD.
1. Be sure your insurer has the latest, correct employee classifications.
2. Ask about preferred policy holder insurance packages.
3. Ask about dividends or other financial incentives to get a break on your premium.
3. Ask about dividends or other financial incentives to get a break on your premium.
4. If you don’t like what you’re hearing from your insurer, shop around for a better deal, or shop around for a broker who has more marketplace clout to get your a better deal. Just a thought…
If you cannot obtain coverage, contact you state for coverage. The state may be obligated to provide coverage for those companies unable to obtain coverage otherwise.
3. Your Safety and Workers’ Comp Management Track Record
You, the employer, are the third workers’ compensation cost driver. This means, even though the state and insurers have the final say in what you pay, you can influence your premium rates.
1. Establish and vigilantly maintain aggressive safety and workers’ compensation management programs at work.
1. Establish and vigilantly maintain aggressive safety and workers’ compensation management programs at work.
2. In-service employees regularly on safety precautions to prevent work related injuries.
3. If and when work related injuries do occur, aggressively pursue a workers’ comp management strategy, keeping employees engaged and focused on returning to work in a modified duty job at the earliest possible date. (workersxzcompxzkit)
When your insurer sees evidence of safety and workers’ comp management, i.e., a reduction in frequency and severity of work-related incidents, a reduction in convalescence time, an increase in return to work events – you are then in a position to bargain for more favorable premium rates.
When your insurer sees evidence of safety and workers’ comp management, i.e., a reduction in frequency and severity of work-related incidents, a reduction in convalescence time, an increase in return to work events – you are then in a position to bargain for more favorable premium rates.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: [email protected] or 860-553-6604.
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