Manage Your Way to Lower Workers' Compensation Premiums

If, like many employers, you struggle with managing your workers’ compensation program, here are some steps that will help you if you take the time to implement them. Don’t expect to reduce your premiums overnight, but instituting these small changes will improve your program and help to reduce costs, as well as make your company more attractive to the insurance marketplace.

First, assign someone in your company to manage your workers’ compensation claims. It may be your personnel director or your office manager, but this person should have some familiarity with workers’ compensation and safety, because the two go hand-in-hand.

Next, be sure that you provide this coordinator with adequate training. There is ample training from firms that specialize in employment issues, including workers’ compensation. Also ask your insurance agent or broker what courses may be available to help train this individual.  

Your claim coordinator should institute a return-to-work (RTW) program. Given recent changes in the Americans with Disabilities Act (ADA) and also because RTW programs reduce lost-wage compensation and help to decrease depression and improve morale in injured workers, RTW is no longer optional for employers, whether large or small.

Next, select several medical providers to treat your injured workers. Especially if you can direct the injured worker’s first visit or ongoing care in your state, finding the right medical treatment is critical. Locate an occupational health clinic and discuss their approach to treating your employees. Your workers’ compensation adjusters may have recommendations. If your employees are spread out geographically, find occupational medical clinics in all the areas where your employees typically work. Occupational doctors are trained to return employees to work at the earliest possible time in an injury, which saves costs. Your claim coordinator should work to build a relationship with these doctors, because many visits to emergency rooms can be avoided when local clinics are utilized. With emergency room bills averaging about $800, it will pay huge dividends if only the most seriously injured employees treat there.

            Then, develop specific job analyses for each position. This should include a step-by-step breakdown of the detailed tasks your worker performs and the estimated length of time that task is performed each day. This will help doctors determine how to modify this position so that the injured worker can perform it safely. However, if that position cannot be modified adequately to meet the injured worker’s abilities, let your doctors know that you will accommodate injured employees in alternative positions. With layoffs looming, many employers have tasks that still need to be completed but go undone due to downsizing. These tasks may be ideal for either part-time or full-time accommodated duty for your injured workers.

            Finally, supervisors must be trained to promptly report injuries and commit to providing modified duty. Many will hesitate, saying things like, “I don’t have time to baby-sit an employee.” Many managers and supervisors feel apprehensive about taking an injured employee back without a full medical release. In today’s work environment, it is critical that supervisors learn to overcome this reluctance and only education will do this. Partner with your broker or carrier to train supervisors.

            With budgets shrinking, instituting a well-run workers’ compensation program has never been more important than it is today. Follow these simple steps and you will find that within a year or two, insurance companies will be more willing to write your business and your premiums will decrease. Who couldn’t use a rate reduction?