According to the Occupational Safety and Health Administration (OSHA), businesses spend approximately $170 billion a year on costs associated with occupational injuries and illnesses. As a result, it should come as no surprise that most businesses are always looking for ways to reduce their costs when it comes to their workers compensation programs. Doing so is undoubtedly a smart move – but is it possible to reduce costs?
In short, yes! With proper claims management, reducing workers compensation claims is within reach for most businesses. Here are a few tips.
Create The Right Team To Handle Claims
An effective workers compensation management system begins with the right set of personnel ready to handle each claim thoroughly from start to finish. A “team approach” to handling workers compensation claims is beneficial in that it allows you, the employer, to exercise the most comprehensive control over each claim. Consider including the following individuals as part of your workers compensation team:
- Company operations and supervisory representative
- CFO/controller or insurance coordinator
- Human resource manager
- Risk manager/safety director
- Claims coordinator
- Claims consultant
- Insurance agent/broker
- Insurance carrier claims adjuster
Among these various team members, it is especially important to find a knowledgeable insurance agent. You should be able to depend on your agent to be familiar with the various statutory and regulatory requirements, and as a result, you can reasonably expect your agent to provide you with a wealth of workers compensation information beyond just a quote for insurance.
Prevent Small Injuries From Becoming Big Claims
BenefitsPro points out that “strains and sprains of backs, necks and joints” amount to only 8% of injuries, but account for 80-90% of the costs in the system. Although these types of injuries generally only require one or two visits to a doctor, if they occur frequently and are not addressed, they can turn into a larger health problem for the worker which in turn becomes a bigger claim down the road.
Addressing this problem goes hand in hand with MEL’s (New Jersey’s Municipal Excess Liability Joint Insurance Fund) first tip for controlling workers compensation claims: use the most skilled doctor to treat a particular injury. Preventing repetitive injuries and achieving long-term recovery requires employers to provide each worker with effective and comprehensive medical treatment appropriate to his or her injuries whenever necessary. This ensures not only a healthy work force, but a quicker return to work after an injury, as well.
Implement A Transitional Duty Program
A transitional duty program, or a “return to work” program, allows workers to return to work in a limited capacity, reducing the number of lost work days. Transitional duty programs have several cost saving benefits. For example, LexisNexis points out that such programs reduce lost wages, which in turn decreases claims, and therefore reduces insurance premiums. Also, by bringing a worker back to 100% pay, rather than keeping them at the 50% to 70% of wages received under their workers compensation benefits, you only pay 50% to 30% more but benefit from having that experienced employee working 40 hours per week rather than none.
New Jersey’s MEL also recommends implementing a transitional duty program, but warns that an injured worker’s ability to return to work depends on his or her special circumstances. As such, MEL advises coordinating with the worker’s treating physician to come up with the most effective transitional plan for that particular employee.
While the above list contains a few of the most important considerations for cutting costs associated with managing workers compensation claims, it is important to stay involved and constantly review your business’s systems to ensure that claims are being processed both safely and efficiently. Periodic reviews will also help you identify any problematic patterns and trends particular to your business, which will allow you to take specific action to cure those deficiencies.
Because every business is different, your system should evolve to fit your business’s particular needs. The methods above will give you a strong start toward that goal.