IMPLEMENT A RETURN TO WORK PROGRAM TO GET INJURED WORKERS BACK ON THE JOB

Workers Compensation premiums represent a major personnel expense for most organizations. Injuries that cause employees to miss work are especially costly, in terms of both lost wage compensation and lost productivity. Also, the longer a worker is disabled and unable to work, the more his future earning power decreases and the more likely it becomes that he will hire an attorney. For these reasons, it is advantageous to both employer and employee to get the injured worker back on the job as soon as possible. As a result, many employers have implemented return to work programs.

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Under a return to work program, the injured employee performs a different job while receiving their prior level of pay. The new job should be matched to their current physical capability, reflecting their state of recovery from the injury. To succeed, this requires a good working relationship between the employer and treating physician. The employer needs accurate information as to the tasks the worker can safely perform; otherwise, the result might be a second, more severe injury. If the worker’s physician will not cooperate or provide a realistic estimate, the employer or insurance company might have to require a physical examination by an independent physician.

A return to work program should be one piece of a comprehensive and coordinated loss management program. The elements of the program should include:

• Immediate reporting and investigation of accidents
• Arrangement of primary medical care
• Return to work program
• Regular communications with the injured worker

To assist in the arrangement of primary care, the employer should provide the treating physician with job descriptions that explain each job’s physical tasks in detail. Meetings with the physician to explain the nature of the employer’s operation will help match a job to the worker’s capabilities. Communications between the physician and the employer are vitally important. The employer might want to arrange for direct reports from the physician or regular reports delivered by the employee. The ideal situation is one where the employee can assume light duties without missing any time. Barring that, limiting lost time to a week or two will still keep the claim’s cost down, resulting in premium savings for the employer. The experience modification formula, which adjusts the premium based on loss history, gives the most weight to losses of $5,000 or less. Getting the injured worker back on the job quickly will help keep the loss well under that limit. Since losses remain in the calculation for three years, the effect of holding down claim costs is long lasting.

Of course, return to work programs have pros and cons. The pros include:

• Limiting or eliminating lost work time
• Keeping the worker involved in the work environment
• Eliminating the need to locate, hire and train a replacement
• Increasing the chances of success should the worker refuse the new duties and sue for lost wage benefits, since the employer can show that it made a reasonable job offer

Among the cons are:

• The employer will pay the employee’s full wage for reduced productivity
• An employee with a bad attitude about his alternative duties could lower morale among the other employees
• If the alternative arrangement does not work out, returning the employee to lost wage benefits will wipe out any cost savings

Although individual cases might not produce the desired results, employers should realize long-term savings by implementing return to work programs. Beyond the verifiable dollar savings, return to work programs can give the employer a more stable, happier workforce and a good reputation with potential employees.

LIMIT DURATION OF WORKERS COMP CLAIMS TO MINIMIZE COSTS

Workers Compensation claims are a major cost of doing business, and the length of time a claim remains open has a large effect. Claims that stay open for long periods of time are more likely to involve attorneys, high medical bills, and significant payments for lost wages. According to the Insurance Information Institute, between 2002 and 2007 the medical cost per lost-time claim (claims where the injured employee is unable to work) rose 50% faster than the annual rate of medical inflation for the economy as a whole. The institute estimates that attorney fees increase claim costs by 12% to 15% with no net gain in benefits to the worker. Most states index the maximum payment for lost wages to the state’s average weekly wage, a figure that generally rises each year.

Limiting the duration of Workers Compensation claims is an important strategy in the effort to hold down costs. To do this, employers have several options at their disposal:

• Prompt notice of claims to the insurance company hastens the onset of medical treatment, speeds up the injured worker’s recovery and return to work, and reduces the likelihood that he will hire an attorney. Therefore, requiring workers to immediately report all injuries, however minor, and promptly reporting them to the insurance company can have a huge impact on the duration of a claim.
• A prompt and thorough investigation of the incident is just as important. Interviews with the injured worker and witnesses, photographs, and other information gathered as soon as possible will help the insurance company to properly adjust the claim.
• If the employee will be out of work for an extended length of time, the employer should keep in regular contact. An injured worker who gets the sense that his employer does not care will become a receptive audience for plaintiff attorneys. Employers might want to call the worker periodically to check on their condition, offer assistance with completing the paperwork, and generally to check on their emotional state.
• The employer should have a good understanding of the state law pertaining to the waiting period for benefits covering lost wages. This is especially true if the employer operates in several states, as their laws might vary widely. Understanding how the law applies to the worker’s situation will help the employer set expectations properly. This reduces the chance of misunderstandings that can lead to problems down the road.
• Building relationships with the physicians treating the employee will keep the employer better informed as to his condition, treatments, medications, and expected duration of disability. This should eliminate surprises and help the employer get the employee back to work sooner.
• Return to work programs can shorten claim duration and reduce costs significantly. These programs permit an injured employee to return to work in some capacity before he has recovered to the point where he can resume his previous duties. They reduce payments for lost wages, meet the worker’s need to feel productive again, and remove incentives for the worker to hire an attorney.
• Employers should review loss reports with their insurance agents and claim adjusters and ask questions about losses that do not appear to be progressing toward closure. They should also look for patterns in the loss reports to identify correctible factors that raise the cost of lost-time injuries.

Employers owe it to their workers to provide a safe workplace and benefits to help them should they get hurt. With some extra care and attention, employers can meet those obligations and keep costs in check. Contact our office today to see how we can help!

REALIZE SUBSTANTIAL SAVINGS BY REVISING YOUR INSURANCE COVERAGE WHEN DOWNSIZING

In recessionary periods it is common practice for companies to downsize their operations. Downsizing would naturally include both your physical assets and personnel. Taking stock of your insurance requirements and re-evaluating your policy coverage should also be included in your downsizing strategy. And, even if you are not downsizing in the immediate future every business owner ought to take a close look and audit their insurance package anyway. If you are wondering why you should bother, the reason is simple: You could be missing out on some substantial savings!

Let’s elaborate further on the two main reasons you might want to audit your insurance coverage:

• Paying for what you don’t need – If you are selling off assets then simply put, you don’t need to be paying for the insurance coverage. Similarly, if you’re reducing personnel then you don’t want to be paying for unnecessary Workers Compensation coverage, do you? If your policies are based on the value of your current assets then you will want to re-adjust your coverage and save on the premiums in the process. You might even use some of the premium savings to boost your EPLI coverage because laid off workers are not only disgruntled, but litigious minded when the pink slip lands on their desk.
• There are bargains out there – Even insurance companies have to compete vigorously in a recessionary marketplace. Better deals can be obtained if you shop around. If you cannot find better competitive prices for your premium dollar, you will likely find alternative policies that offer better coverage for the same premium.

Start with an audit

Contact your insurance broker to help you perform a full insurance audit of your current situation. Think about your needs down the road by considering best and worst case scenarios. Don’t procrastinate and wait until the last minute when your policy is about to expire. An audit is best performed a few months prior to your policy expiration.

Ensure that your broker also comes back with other quotes from your insurance carrier’s competitors. This will at least prompt a very competitive bid from your current insurance carrier. They want to keep your business.

Remember to re-evaluate your insurance deductibles

When reviewing your policies don’t forget to review your current deductibles. If you are prepared to assume more risk then you can lower your premiums even further by increasing policy deductibles. Call us to arrange for a policy review with one of insurance professionals.