Controlling Your Workers’ Compensation Costs

Workers’ Compensation insurance is required for most employers in most states (all but Texas). While it’s a necessary cost of having employees, it’s one cost that can be controlled.

Many employers pay high premiums for workers’ compensation because they have too many claims open for long periods of time or because the company is not effectively controlling their workers’ compensation process.¬†OLYMPUS DIGITAL CAMERA

There are several ways an employer can work to control these workers’ compensation costs including creating and enforcing a safety program, properly managing any injuries that do occur on the job, and implementing a “Return to Work” program to get employees back to work as soon as possible following an injury.

Creating and Enforcing a Safety Program

While it’s impossible to prevent all injuries from occurring, implementing a safety program may help reduce some common injuries in your workplace. Some states, such as California, require that employers have a written safety program in place, but for most employers in other states where this is not required it’s still a good idea.

The purpose of the safety program is to identify and eliminate workplace hazards. This can be done by doing an internal assessment of each position and/or department, by hiring a third-party consultant to come to your business and do a safety evaluation, by downloading and customizing an industry-specific template (there are many companies online that provide these, for one example click here), or by using the OSHA on-site consultation program which offers advice to small and medium-sized businesses (for more information, click here).

Your safety program should include procedural items like proper lifting techniques and safe use of any machinery or equipment. It should also describe the recommended and required safety equipment, such as gloves or safety goggles.

Each position or department in your organization may require a different safety program based on the requirements of the position and the equipment involved for each department.

Each new employee should be trained on all safety procedures and requirements. It’s also a good idea to have annual safety training with all employees to reinforce the program and your company’s commitment to safety.

When an employee (new or experienced) is seen not following safety procedures they should be corrected right away. If an employee makes a serious safety infraction or repetitively disregards safety procedures they should be subject to disciplinary action and/or termination of employment.

Management should consistently reinforce the importance of safety in the workplace and all managers should lead by example when following all company safety procedures.

Proper Management of Employee Injuries

All companies should have a procedure in place for when an injury occurs on the job. This procedure should include instructions for an employee who gets injured to notify a supervisor or the Workers’ Compensation administrator for your company as soon as possible following the injury.

Employees who work hours or days outside of regular business hours should also be given instruction as to who to contact in the event of an injury.

An injured employee should receive medical treatment right away to prevent potentially aggravating an injury further.

You should have one person or team responsible for post injury management. This person or team should have clear steps to take for each claim from the time the injury occurs through the time the employee has returned to work and the claim has been closed.

Return to Work Program

The goal of the company should always be to get injured employees to return to work right away or within the first few days following an injury. The longer a claim remains open, the more expensive the claim becomes due to payments for lost wages and additional medical care. Most workers’ compensation carriers have a small waiting period before employees begin receiving indemnity payments (payments for lost wages). If the employee can return to work before that waiting period has ended, there will be no lost wage charges incurred for the claim which keeps the total cost of the claim to a minimum. Getting an employee back to work as soon as possible is also good for the employee’s spirits and will prevent them from feeling alienated or “removed” from the daily operations of the company while they are healing from their injury.

The person or team responsible for post injury management should notify the injured employee, the adjuster and the physician treating the injured employee that the company has a Return to Work program in place with a goal of getting the employee back to work as soon as possible. This will include modified or restricted work duties when needed. For example, if an employee’s injury restricts him from heavy lifting for three weeks the company will make sure there is no lifting required for the employee during the three week time period.

The Return to Work program should be described to all employees in the employee handbook and at the time of hire.

The company should make every attempt possible to accommodate any restrictions due to the injury such as modified work duties or a different work schedule as deemed necessary by the physician treating the injured employee.