TEN WAYS TO CUT WORKERS’ COMP COSTS
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Workers' compensation costs the average employer $1.33 per $100 of payroll. That might not sound like much, but one or two injuries can send your costs skyrocketing. Here are some pointers to keep those costs under control.
1. Check occupational class codes on your policy for accuracy. Workers' compensation insurers base premiums on occupational class code, which reflects the relative hazards of occupations in your main industry. If your code is incorrect, you could be paying too much.
2. Check your experience modification for accuracy. If you have more than a "minimum premium" policy (more than $2,500 or $5,000 in annual premium, depending on the state), the insurer will experience-rate your coverage. This means it will adjust your premiums based on your organization's past claims experience— the more claims, the higher your premiums. A factor of one indicates your experience is average; your premiums won't change. A factor higher than one indicates worse than average experience; you will pay more for coverage than the average employer in your occupational classification. A factor lower than one indicates better than average experience; your premiums should drop.
3. Review your workers' compensation loss history at least once a quarter. This can help you spot recurring safety and health problems and correct them. You can also correct any discrepancies before they become part of your experience modification and affect your rates.
4. Have your claims administrator review your claim reserves at least once a quarter. Do they seem reasonable for the type and severity of the injury? If not, discuss it with your insurer. Make sure your experience modification is recalculated whenever reserves drop.
5. Prevent injuries by pre-screening applicants for jobs that require physical exertion, such as lifting, or certain physical characteristics, such as sharp vision or hearing. Test their abilities by creating situations similar to what they will encounter on the job. (To avoid charges of discrimination on the basis of disability, you should make a conditional offer of employment before testing!) For jobs requiring strenuous physical activity, you might also want to require a physical exam.
6. Check with trade associations and other business groups. Are you a member of an industry association or other business group, such as a Chamber of Commerce? Many groups arrange for discounted coverage; your membership might make you eligible.
7. Prepay premiums. Many insurers will give discounts for prepayment.
8. Give managers incentive to focus on safety. Track claims activity and safety violations by department and link managers' compensation to the achievement of safety goals within their department.
9. Give employees incentives for safety, too. Award bonuses for achieving a certain number of accident-free days, or to employees who suggest ways to improve safety.
10. Provide modified-duty jobs to partially disabled jobs to get them back to work quickly after an injury.
For more suggestions on improving safety and controlling costs, please contact the PCOC Insurance Program department at Jenkins Insurance Services at (877) 860-7378. |
