How to Dramatically Reduce Your Worker’s Compensation Costs

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Employers always want to trim costs whenever and wherever they can. Streamlining processes and doing more with less are admirable goals. But when it comes to Workers Compensation, businesses must tread lightly. Unlike health insurance, employers aren’t allowed to cut benefits levels. Luckily, there’s a simple step that can save employers a lot of money when it comes to Workers Comp claims.

Since treatment for on-the-job injuries is mandated by the laws in the state where the employee was injured, the most logical step would be to eliminate on-the-job injuries and to reduce the cost of injuries when they do occur. A workplace that experiences fewer work-related accidents and lower total costs of accidents will realize much lower work comp premiums over time.

There’s two simple ways to reduce workers compensation costs:

Create a “Return to Work” Culture

What we mean by a “return to work” culture is that you foster an environment where workers want to come back to work. This involves creating a formal Return to Work program for those who qualify. These programs involve alternative “light duty” job positions that do not interfere with the physical healing an injured worker needs, but allows them to get back to work earlier.

Continuous outreach to the injured worker and making sure they’re being taken care of. Pro-active communication is essential and making sure they know you want them back at work as soon as they’re healed. Let them know the details of your Return to Work program so they can share it with their healthcare providers.

One important benefit of an RTW program is that it reduces the cost of indemnity (i.e. lost wages) payments by your work comp carrier. Every dollar that gets paid out is going to be ultimately calculated into a formula in years to follow, that will increase your work comp rates. Not to mention the productivity value you’ll get from improved morale and having the employee back at work sooner.

Introduce a Safety Program

A safety program shouldn’t be a booklet that you download online and then stick on a shelf until your next OSHA audit. It’s been proven time and again that employee safety training and practices absolutely reduce the frequency and severity of workplace injuries. You can’t just assume your employees already know how to be safe. Employees may not think about good safety practices unless you train them and find ways to enforce those good habits.

A safety program doesn’t necessarily have to be complex, either. Start small. Figure out the most likely accidents that can happen, and then empower your employees to quickly address simple hazards like tangled rugs or wet floors that can cause a variety of slips, trips, and falls. Make sure safety rails or stair banisters are installed correctly and at the correct height. Mark steps up and down so that they’re clearly visible. Remember that a safety program isn’t just a one-time thing. It’s a plan that can evolve to meet your individual business needs.

Remember: The least expensive claim is the one that never happens. We’d love to discuss your Worker’s Comp insurance needs with you. Contact us with questions or for a quote.

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