When you are the one in control of your business’s workers comp program, it is important to assess it periodically to make sure the program is running within reasonable cost to the company. There are several different steps to take in order to assess costs. The process may be time consuming, but well worth the effort if it can reduce claims and keep costs to a minimum.
Whether you are starting your business’s initial workers comp program or you are new to the already established position, these tips can help lower your workers comp costs.
- Review the current workers comp insurance policy. Check payroll information and class assignments to make sure you are getting the right rate. If you are unsure, contact your insurance agent or underwriter for clarification.
- Brush up on state and federal laws. Before preparing or revising your workers comp program, be sure your new plan will fall within state and federal guidelines for each of your business’s locations. Your best option for finding out information is to contact each state’s insurance department.
- Study company loss data. Which areas have the most claims? Are conditions better in one location than another? Loss data can sometimes help pinpoint problems that can easily be remedied.
- Prepare self-evaluation questionnaires. Send questionnaires to all employees in every area of the business. Find out how they feel about company procedures by asking open-ended questions. Encourage thorough answers by eliminating questions that could be simply answered with a yes or no. Follow up with phone interviews for more in-depth answers.
- Review company procedures, employee brochures. Be sure that everything used as a teaching tool for employees is up to date and completely pertains to each area of the business.
- Conduct focus groups to find out how employees feel about not only loss procedures, but about working for the company in general. You may find that unhappy employees sometimes use workers comp claims as a way to indirectly express frustration with the job. Simple changes in employees’ work environments can have a dramatic effect on workers comp costs. Example: allowing music or having morale boosting events can not only reduce workers comp costs, but could also increase production.
- Utilize your insurance carrier’s loss control department. Your insurance carrier’s loss control department is always available to help. It is in their best interest as much as yours to keep claims down. A loss control rep can help assess hazards and offer suggestions to reduce claims and make the workplace much safer.
- Consider an independent consultant. In some cases, it is wise to have an impartial outside source completing evaluations. However, having an internal source who knows the company inside and out may also be more effective. Discuss the options with the business’s owners to decide.
Once you have all your data including self-evaluations, loss data, current policy review, employee focus group results, etc. you can begin to develop your program so it fits your specific company profile. Before implementing any program, have it reviewed by your company’s legal counsel. After the program is developed, be sure to reevaluate periodically to stay up to date on workers comp laws, procedures, and your company’s budget.
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Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices.
Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/
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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.