In today’s economy businesses are looking at increasing their profitability. There are two ways to accomplish this goal: the first is to increase sales, and the second is to decrease expenditures. Through our work with businesses around the country we understand the tremendous expense that insurance premiums cost businesses, specifically the one with the greatest impact is Workers’ Compensation.
Most businesses do not realize how much money could be saved on their Workers’ Compensation program if proper Risk Management strategies were implemented to help control the costs.
Here is a 10-point checklist that can serve as a road map to determine if you’re doing all you can do to safeguard your company, protect your employees, and help you avoid excessively high Workers’ Compensation premiums:
1. Do you know your lowest possible Experience Modification(MOD) Factor?
Even if your MOD is low, working towards the lowest possible MOD is the best way to ensure long-term savings.
2. How effective is your hiring process?
If injuries occurred shortly after hiring, the hiring and training process should be examined. Having a consistent process for background checks and medical exams helps prevent hiring the wrong person for a job.
3. When was the last supervisors’ training program? Are supervisors held accountable for work place safety or it is tied into their performance?
Supervisors play a key role in the management of injuries as well as staff morale. Consistent training in both the functional and human relationship aspect of their jobs is essential to be sure they have the confidence and skills to create a high performance culture within their team.
4. How quickly are claims reported?
If claims are not reported within 24-hours of the incident, there is work to be done.
5. How many of your claims involved lost time?
The percentage of claims that are lost time is another key metric in managing Workers’ Compensation expenses. A good target for lost time is no more than 20-25% of claims. Higher percentages are a red flag, signaling a problem.
6. How often are open claims and reserves reviewed?
Excessive time lags in care or claims may indicate that a case can be spiraling out of control. At a minimum, open claims and reserves should be reviewed quarterly.
7. How many of your claims are litigated? And what is being done to prevent litigation?
Ideally, a 5% litigation rate is very good, 10-15% is good and anything over 20% should be considered a red flag and warrant further analysis.
8. Do injured employees hear regularly from their supervisor and receive payments on a timely basis?
Injured employees who feel neglected or hopelessly lost in the system are a primary target for aggressive attorneys.
9. Is your return to work program working properly?
The sluggish economy and uncertainty over the sustainability of the recovery has put pressure on return to work programs. Examine your program to see if the jobs are meaningful, truly transitional, and meeting established metrics to return the injured employee to their original position in a timely fashion.
10. Are you and your employees prepared for an OSHA visit?
OSHA has an aggressive agenda. If it’s been awhile since you’ve done a walk-through to identify potential problems, reviewed your recordkeeping training documentation, written safety and health programs or discussed the procedure should an inspector appear, now is the time to do it.
Assessing these key areas of your Workers’ Compensation program are critical and will help to optimize profitability. My question to you is: What is the cost of doing nothing? As always, it is your choice and your money.
