10 Easy Ways to Cut Workers Comp Cost

One of the biggest mistakes an employer can make is to delay the reporting of a workers compensation claim. The employee, whether suffering a major or minor injury, is going to understand very quickly that the employer is unconcerned about his well being when the injury is ignored. Also, the sooner the claims adjuster is aware of the injury, the sooner the adjuster can start the claims handling process moving the claim forward. The sooner the employee is treated, the sooner the healing process can start, and the sooner the employee will be able to return to work. (WCxKit)

The memory of the injured employee, the supervisor, and any co-workers who witnessed the accident begins to fade with the passing of time. To have the most accurate record of the claim, all witnesses and the employee’s supervisor must be promptly interviewed. Write down what is said. If there are any tools, equipment or machinery involved in the accident, inspect it and document any failure of the tools, equipment or machinery. Do not dispose of anything involved in the injury until the claims adjuster has had an opportunity to inspect it or to have it inspected by an expert.

Following an injury the employee is going to be concerned about: 1) obtaining the needed future medical care 2) how they are going to replace the lost income 3) losing the job if they are unable to work 4) the prospect of possibly being disabled and unable to ever return to the job.

While the adjuster can explain the workers compensation claim benefits, the adjuster does not replace the employer in the claimant’s mind. The claimant is feeling vulnerable after an injury. Contact from the employer helps to reassure the claimant that the employer cares about their well being and returning them to work.

This is one area where most employers fall short. Even if the employer has kept in contact with the employee, the employer still needs to be in contact with the medical provider. Often the medical provider will be very cautious with the injured employee and will keep them off work the maximum time needed for full recovery if their only input is from the employee. For example, if the employee is asked by the doctor what is the maximum weight of lifting at work, the employee may honestly say 100 pounds, but that may happen only once per month. If the employer has advised the medical provider to modify the employee’s position to not lift over 20 pounds, the employee will be returned to work much sooner.

The easiest way to accommodate an injured employee’s work restrictions is to have an established modified duty return to work program in place. If all employees know before an accident they are considered a valuable part of the company with an established return to work program, they will be more compliant with both the employer and the medical provider about working a light duty job until they are able to return to work full duty.

This is a no-brainer. The accident that never happens does not incur any claim cost. Set up a safety program to identify those aspects of the work that potentially can cause an injury. Analyze what can be done to reduce or eliminate the risk of injury, and then do it. Establish the proper methods of doing the day-to-day task so that the potential for injuries is removed. Be sure the employees have everything they need to do their job in a safe manner. Arrange for on-going safety inspections to identify and correct any hazard.

It is not enough for the employer to know the potential hazards of the job. The employees must know too. The employees must be trained to do the job correctly, including complying with all safety measures. Whether it is the safe operation of machinery, or the proper lifting techniques, the employer can reduce workers comp cost by training the employees to work safely.

When employees think safety is “management’s thing”, they are not considering themselves in the safety quotient. Involve the employees in the safe operation of the company by providing small monetary rewards to employees of a department that avoid injuries over a given period of time. The cost of the ‘reward’ will be far cheaper than the cost of workers compensation claims and the resulting insurance premium increase.

Underwriters make mistakes. They can have your business improperly classified. They may also have employees misclassified or they may have the payroll information wrong for one or more categories. If the workers compensation insurance premium has risen lately and you do not know why, arrange for an independent premium audit. As the premium auditor works for a percentage of the premium reduction, it makes good sense to have your premium audited every couple of years or when there has been an increase in premiums. (WCxKit)

The last thing the insurance company is going to admit is that the workers comp claims were poorly handled. When work comp claims are poorly handled, they cost more. The carelessness or oversights in claims handling comes back to the employer in the form of higher insurance premiums. If the results on the claims are not expected, hire an independent claims file auditor to review the files for proper handling, proper reserving and proper settlement.