A Workers Comp Claim’s Iceberg Effect

Workers in the claims profession and also on the employer side will often only think of claims as costs of wage loss and medical exposure.  It is true that those costs are the ones on the surface.  The injured worker has created a monetary exposure of their loss of wages covered by work comp payments, and also their medical expenses.


But we like to remind employers of the hidden costs.  To create the picture of hidden exposures we like to use an iceberg floating in the ocean.  On the surface, you see the iceberg.  But hidden underwater, the extent of the iceberg can stretch to great depths.  It is the hidden hazards that can create as much havoc as the iceberg you see above the water surface.  You need to think of the costs and expenses that you can and cannot see.



Time spent dealing with the claim

A worker at the employer has to deal with the paperwork end of the claim.  This can take their time away from other tasks they have to deal with on a daily basis.  Time spent on paperwork filing the claim.  Time spent getting medical updates and discussing the claim with the adjuster.  Time spent getting wage histories, reviewing state forms, completing OSHA reports, and so on.  While it may seem like nothing, if you look at the time spent over the course of the year dealing with claims paperwork, emails, conference calls, etc., the production time lost can be quite significant.


Loss of production on the job floor

The worker that was injured had a job they were hired to complete.  If you remove them from work, someone has to cover their shift.  Another worker has to complete their job and maybe the job of the injured worker.  Do you keep the injured worker as an active employee or do you terminate their employment and look for someone else to replace them?  Who has to cover their shifts?  Does this lead to increased injury exposure by stretching your current workforce too thin?  Does production suffer due to injuries and a lack of depth of workers?


Morale of other workers

Other workers hear gossip about the injury, what is happening, what the injured worker is dealing with, and so on.  Time around the water cooler or lunch room can be spent talking about work injuries and the ramifications involved with filing a claim.  Workers can see this as an “Us vs Them” mentality (this is why communication is so important) where the workers feel as if they have to fight for what they are entitled to should a work injury occur.  Distrust between floor level workers and management can develop, and it can hinder the overall atmosphere at an employer creating a negative connotation.


Creating light duty jobs can be seen as favoritism for certain workers

Those employees that are longer term workers will recall a time when they were not allowed to come back to work until they were fully released from care.  Now the environment can be one of creating light duty work to bring workers back while on restrictions.  Maybe not all workers are allowed to come back to work depending on their job (we don’t recommend this).  However they see worker X brought back right away, being paid their normal wage for completing a “cake job” while other workers in other departments are not allowed to come back at all.  This situation will create a labor issue, perhaps more so in a union environment, and it can now lead to wage grievances and meetings between management and workers about this issue.  This is time consuming and usually does not lead to a positive proactive result.



Time Is Valuable, Use It Effectively

So as you consider your claims at your workplace, think of the hidden costs and expenses that are associated with these claims.  The biggest trend you will see will be that of time spent on the claim on the back end.  Yes the adjuster has the task of handling the claim to resolution, but the employer is also actively engaged in the process. Most employers are not large enough to have a dedicated claim liaison where their only job is to deal with the insurance carrier or following the claim to its end.


Time is a valuable asset.  Production is valuable.  Work floor morale is valuable.  Everything has a cost and an expense tied to it.  Safety is everyone’s job at any employer.  If you are avoiding claims, you are performing at your peak of production.  Every claim you have, even minor in nature, can rob your workers of their ability to be focused on the job they were hired to do.




Author Michael Stack, Principal of Amaxx Risk Solutions, Inc. He is an expert in employer communication systems and helps employers reduce their workers comp costs by 20% to 50%. He resides in the Boston area and works as a Qualified Loss Management Program provider working with high experience modification factor companies in the Massachusetts State Risk Pool.  As the senior editor of Amaxx’s publishing division, Michael is on the cutting edge of innovation and thought leadership in workers compensation cost containment. http://reduceyourworkerscomp.com/about/.  Contact: mstack@reduceyourworkerscomp.com.


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MODIFIED DUTY CALCULATOR:   http://reduceyourworkerscomp.com/transitional-duty-cost-calculators/

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.


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