5 Ways to Take Control of Your Workers' Comp Costs
According to the 2016 Oregon Workers’ Compensation Premium Rate Ranking Study, Illinois remains the most expensive state in the Midwest for workers’ compensation rates. Not to mention eighth in the country. This being the case, how can businesses manage their workers’ comp programs and in an effort to reduce these inflated costs?
There are a number of practices that can be implemented to help control your workers’ comp costs. I’ve included my top five strategies that I’ve had success with when working with clients:
- Who you hire: Establishing an effective hiring and orientation procedure is very important. However, it’s also important to gain insight as to who you’re looking to hire. Use the internet, be proactive and do your due diligence. There are many social media sites and governmental sites that provide a significant amount of background information. Although it’s illegal to discriminate from hiring for various reasons, there are certain intangibles that must be considered during the hiring process.
- Top down safety and claims culture: The leadership team needs to be involved in the company’s safety and claims initiatives. The goal isn’t to micromanage the efforts of the risk management personnel, but rather establish a safety culture for all employees. The results typically net a win–win; less accidents and injuries – with decreased workers’ comp costs.
- Effective, early return to work programs: Getting an employee back to work after an accident can be a monumental piece of controlling your overall costs. Lost time claims can cause modification factors to increase, employee morale issues, lack of motivation in good employees, expenses to hire replacements, etc. An effective early return to work program will have a tremendous impact on your company’s culture as well as significantly reduce workers’ comp costs.
- Classification and audit review: Are your employees being appropriately classified? Is your audited payroll being applied to the correct classifications? Classification descriptions change regularly. It’s important to periodically review the NCCI classification descriptions to confirm that your payroll is being appropriately rated. Misclassifications can result in increased experience modification calculations and overstated premiums.
- Thorough investigations to improve loss control efforts: In addition to regulatory reasons, thoroughly investigating the cause of each accident will allow you to prevent recurrences. These investigations should also include “near misses” and “close calls.” Establishing an accident review team (including members from the leadership team) is very effective in ensuring corrective action and compliance. In addition, insurance fraud runs rampant in workers’ comp claims. Investigations will also provide confirmation that the injury or accident is legitimate.
For more guidance on reducing workers’ comp costs, contact an ‘A’ Team member today.
- Workers’ Compensation Videos
- Workers’ Compensation E-Book
- 18 Benefits of Using Return to Work Programs
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