Injury Duration Guidelines and Transitional Duty Cost Calculator Work Together

An injury duration guideline is a tool employers use to get an idea of how long an injured employee should be out of work for a particular injury. Often, even though carriers know about injury duration guide, employers may not, especially employers with someone new handling workers’ compensation claims. AMA, Dr. Presley Reed are the two most note-worthy sources of this type of guideline. Workers Comp Kit has a one-page that is laminated that’s a good quick reference, especially good for training or to show senior management to show the type of tools that enpower the employer.

An injury duration quidelines do not replace a physician’s advice, but it gives the employer a sense of whether the time injured employees are actually out of work or say they need to be out of work matches up with the time the guideline’s gives for a particular injury.

A Scenario

1. An employee has a fractured knee.
2. The employee says s/he will be out of work for six months. Because you know this time frame is disproportionate to a normal injury of that type you can dig more deeply into why the employee thinks six months off is needed.
3. By replacing heavy work with light work (in your return-to-work program), the employer “saves” six weeks of lost wage indemnity payments.

The Transitional Duty Cost Calculator

Using a transitional duty cost calculator allows an employer to calculate the dollar amount (cost of an employee being out of work (OOW)) by multiplying the estimated number of days saved by the estimated average indemnity cost per day. Add this figure to your cost of replacement labor and your grand total cost of an out-of-work employee is quite daunting. (See link below for this FREE tool.)

To make the figure more frightening, divide your dollar amount by the company’s profit margin and you will see the amount of money it takes to “replace” lost expenses from an out-of-work employee.

A Scenario

1. An employee with a fractured knee returning to work in six weeks on transitional duty saves 42 days of indemnity.
2. If the average cost per dayis $200, and you pay a replacement worker $3,000, the transitional duty saves your company $190,000.00 if your profit margin is 6%.

Knowing what your true costs are when a worker is out on comp is a huge incentive to return injured employees to work as soon as they are medically able. (See ink below to try this handy tool.) It’s also a good reason to have a solid transitional duty or return-to-work program in place.

Showing the dollar value of the savings of six weeks helps to gain management commitment for a transitional duty program.

Author Rebecca Shafer, J.D. President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact her: RShafer@ReduceYourWorkersComp.com or 860-553-6604.

FREE WC IQ Test: http://www.workerscompkit.com/intro/
WC Books: http://www.reduceyourworkerscomp.com/workers-comp-books-manuals.php
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php

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@WorkersCompKit.com.