3 tips for controlling your workers’ comp costs

Workers’ compensation is just one of many costs employers have to juggle. Fortunately, you can take small steps throughout the life of your policy to control your premiums. Follow these three tips to help make workers’ comp a smaller piece of your budget.

Prevent workplace accidents

Workplace accidents carry direct and indirect costs. Your insurance carrier covers direct costs, but indirect costs come out of your pocket.

Workplace accidents carry direct and indirect costs. Your insurance carrier covers direct costs, but indirect costs come out of your pocket.

The best way to manage costs is to prevent accidents. The Occupational Safety and Health Administration estimates that for every dollar you invest in safety, you could get up to $6 return in return. You should tailor your safety program to the unique hazards your employees face, but be sure to include these core elements:

  • Get management commitment and employee buy-in.
  • Identify the hazards associated with each job task.
  • Put control measures in place for each hazard.
  • Train employees on the safety program and the safest way to do each task.
  • Continuously evaluate and improve the safety program to ensure it meets your evolving needs.

Commit to return-to-work

Accidents happen, even in the safest workplaces. When they do, they carry human and monetary costs.

Injured workers tend to suffer stress, depression and financial hardship. Meanwhile, employers have to find a way to make up for lost productivity. That could include hiring extra help or paying overtime to current employees. Ultimately, the cost of replacing an experienced worker can be 50 to 150 percent of their salary.

A return-to-work program helps control the costs associated with workplace accidents. The goal is to get injured workers well and back on the job as soon as medically reasonable. Follow this five-step process to launch a return-to-work program:

  • Put the program in writing. Your written program should explain the steps the company will follow from the time the injury happens to the time the employee comes back to work.
  • Assess job tasks. Write down the separate activities or tasks that make up each job. Include physical demands (lifting, typing, standing), environmental conditions (noise, heat, vibration) and the time spent on each task.
  • Identify modified duties. Use your task list to match available work to injured employees’ work restrictions. Modified duties should be meaningful tasks that contribute to productivity.
  • Communicate with injured workers. Make sure injured workers receive company newsletters and other announcements. Call them regularly and ask if they need extra help with their recovery. By maintaining contact, you send the message that you care about injured workers and you want them back on the team.
  • Make a bona fide offer of employment. When you are ready to bring the injured worker back to the job, make a written, bona fide offer of employment that meets the requirements in Texas Department of Insurance, Division of Workers’ Compensation Rule 129.6.

Fight workers’ comp fraud

Anyone who has a stake in the workers' comp system, including claimants, employers and health care providers, can commit fraud.

Anyone who has a stake in the workers’ comp system, including claimants, employers and health care providers, can commit fraud.

Fraud costs the insurance industry about $80 billion each year. Those costs trickle down to everyone in the form of higher premiums. If you suspect an employee is committing workers’ comp fraud, you should remember three things:

Trust your workforce. Most claims are legitimate, and most injured workers want to get well and back to the team. It’s easy to jump to conclusions if you feel taken advantage of, but remember to keep an open mind.

Trust your instincts. Your employees deserve the benefit of the doubt, but you should trust your instincts if you recognize two or more red flags for fraud.

Trust the system. Insurance carriers and regulatory agencies work hard to stop fraud and protect your premium dollars. If you suspect fraud, contact your workers’ comp carrier or the Texas Department of Insurance fraud unit, and let your investigator take it from there.

More information

The Texas Department of Insurance hosts free workers’ comp seminars across the state for employers and injured workers. In addition, Texas Mutual invites the public to visit our Work Safe, Texas website for free workplace safety resources.

 

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