Add TLC to Your Workers Compensation Program
August 14, 2009
According to the Bureau of Labor Statistics (BLS), 1 in 15 employees working at a contractor business will likely suffer a work-related injury each year. Workers compensation can account for 35 to 45 percent of your company’s insurance premium, depending on your state. Controlling these costs could mean the difference between a profit or a loss to your bottom line.
Solution to control costs – add TLC
How can you save money on your workers compensation insurance and positively influence employees’ attitudes about their workers compensation benefits?
Returning an injured employee to work is one of the most effective ways to help reduce workers compensation costs. If a contractor can limit the cost of an injury to “medical only” by offering transitional work to an injured employee, the savings can be significant. Most states’ formulas for calculating workers compensation experience modifiers reduce the medical-only cost of the claim by 70 percent, resulting in a lower “experience mod” for the business. (The state exceptions to this rule are Delaware, Georgia, Iowa, Louisiana, Massachusetts, Missouri, New Mexico, New York, Oregon, Pennsylvania, and Texas.)
For a return-to-work/light duty program to be successful, it should be communicated to all employees regularly—before injuries occur. Injured employees will be more willing to cooperate if they are informed of the program in advance. Most employees have only a vague understanding of workers compensation. The employer can help take the mystery out of the process and help employees view the program as a benefit that requires their cooperation and willingness to get back to work.
Even minor injuries can result in lost time on the job. The injured worker often loses the remainder of the day and co-worker productivity may also be affected. A return-to-work/light duty program can help reduce these costs, too. While the effect on workers compensation costs may be minimal for these smaller injuries, increased productivity and enhanced employee morale are worthwhile side benefits.
Serious injuries require the utmost cooperation from the employee. Morale problems are almost inevitable if the situation is not handled carefully. Seriously injured employees often have genuine fears about losing their jobs and their future earnings. These fears can escalate and worsen the employee’s condition, resulting in an expensive long-term claim. Expressing concern and providing return-to-work/light duty programs can be even more beneficial in these situations. While contractors should avoid guaranteeing available positions for injured employees, they can offer encouragement during recovery and make sure the employee fully understands the process. Good morale is a key to returning an employee to productive work.
Work closely with your insurance company and medical providers so they will understand the requirements of the employee's job and the alternatives that may be available. The injured person may also be included in these discussions to stay informed about the situation. Everyone’s objective is to return the employee to work as soon as possible to reduce workers’ compensation costs and time lost on the job, and to help the employee regain a normal life. Return-to-work/light duty programs can be tailored and flexible to help an employer meet individual employee needs. Different injuries may call for different reasonable accommodations by the employer. The tasks may range from office work to custodial work. If the employee can perform some but not all duties of his or her regular job, the “transitional” tasks should be modified to adapt to the employee’s capabilities.
Employees want peace of mind and assurance that they will be treated fairly if they are injured. It is crucial to contact the injured employee and express the company’s concern as soon as possible after an injury occurs. The first contact is also an opportunity to explain the workers’ compensation process and answer any of the employee's questions. Periodic contact is recommended throughout the recovery period to receive updates on the employee's condition and determine when the person can return to work.
A little TLC can go a long way to help you control workers compensation costs. When injured employees return to work more quickly and feel good about how they were treated, they tell co-workers about their positive experience. Morale improves throughout the company and the recovered employees may become your most dedicated and loyal workers.
This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer. This publication is intended to provide general recommendations regarding risk prevention. It is not intended to include all steps or processes necessary to adequately protect you, your business or your customers. You should always consult your personal attorney and insurance professional for advice unique to you and your business. ©Copyright 2008 Federated Mutual Insurance Company, All Rights Reserved.
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