Help Prevent Workers' Compensation Claims
Mitigating the cost of workers’ compensation insurance is a business necessity. Every workers’ compensation claim has direct cost to the organization. These direct costs can be medical bills, time off wages and in some cases, permanent disability.
There are also hidden costs: production delays, accident investigation, OSHA fines, damage to equipment, legal fees, impact on an employers’ future rates, poor morale of the workforce and productively, training or hiring a new employee, bad press, good will, poor public relations and delays in on time delivery, as well as unhappy customers.
Statistics state these indirect costs can be between 70 to 80 percent of the cost of an injury.
Set Safety Standards
Safety standards are the first step in mitigating costs of workers’ compensation claims:
• Select a person trained in safety to study the past years claims and review the how and why of each claim occurred. (Insurance companies have people trained for this and will often assist at no cost to the employer.)
• Walk through the worksite to see where safety is lax.
• Check to see if OSHA standards are being followed.
• Identifying hazards and correcting potential accident sites should be done immediately.
• Maintain the worksite with preventative and routing clean-up and repairs.
• Establish a safety first environment with a safety program that is documented and publicized to all workers.
• Communicate to your employees, set expectations, provide training and ask for feedback.
• Employers should advise employees that you do not want them to get hurt at work, they are expected to work safely and they are expected to not do things that will result in injury.
• Exercise programs and wellness should be part of culture.
• Establish a return to work program to avoid long absences.
Supervisors are the first line of defense for mitigating workers’ compensation cost. Supervisory training and orientation programs are critical to the success of decreasing workers’ compensation cost. Management must train first line supervisors to report unsafe work environments, insist that safety programs be followed and discipline employees when they are not. Supervisors need to understand that they are accountable for safety and the effect on the bottom line of the company.
Supervisors are responsible for implementing the workers’ compensation return to work program, which reduces cost by as much as 20 percent to 50 percent. Workers who are off the job more than three months have a 50 percent likelihood of never returning.
Supervisors train their employees to perform their job safely, on how to operate machinery and what to do in case of emergency. Additionally they should know where to go for medical treatment and who to report the injury to.
Supervisors should follow up with the injured employee. The prompt handling of the claim saves money, sets the tone and may help avoid future litigation.
The Insurance Company
The insurance company is the quarterback of the workers’ compensation process. They have the resources to work with physicians and medical information to deal with the injured employee.
Employers should meet at the worksite once a year with the insurance carrier so they understand the employers business.
Job descriptions should be given the insurance carrier and physician and they should be made aware of light duty if available.
Light-duty policy should be in the Employee Handbook. The employee is expected to stay within restrictions of the program.
Follow up is critical for mitigating workers’ compensation claim. Employers save money when they are involved in these cases. The employer must be the driver on workers’ compensation claims.
Nancy Roehrkasse is the Senior HR Consultant at HR OneSource, Inc., in Johnston, Iowa.