For most companies, having proper workers’ compensation insurance is required by state law. That means there is a good chance you know how quickly workers’ compensation coverage costs can add up whether you run a company or are otherwise responsible for human resources functions.
While you can’t eliminate the need for insurance, there are some things you can do to help control the price of premiums. If your workers’ comp costs are spiraling out of control, try implementing these strategies to bring them back to manageable levels.
1. Develop Safety Programs To Reduce Accidents and Injuries
This cannot be stated enough. The number one way to reduce workers’ compensation premiums within your industry classification is to limit the number of claims filed. That does not mean you should skip reporting accidents; rather, it implies that implementing safety programs can help keep your employees from getting injured.
2. Proactively Manage Claims
No matter how good your safety programs are, there is still a chance that someone could get hurt on the job. When they do, you must take a proactive stance regarding claims management. One way to do that is to maintain open and continual communication with the employee and your insurance provider.
For some companies, pharmacy benefit managers can help in this process. They handle the prescription portion of benefits from start to finish and can help you pay lower costs for treatment-related medications. In addition to managing and paying claims, top PBMs take steps like negotiating discounts with drug manufacturers and creating pharmacy networks. These steps can help lower the prescription portion of your workers’ comp program.
3. Always Follow Established Accident Reporting Procedures
Another way to manage claims is to get them started on the right foot. This means following established procedures when an accident occurs or an employee reports an injury or illness. If your company has not taken steps to create a policy, now is an excellent time to get started on one.
Once your policy is created, all employees should be informed of it and trained to implement it. That is why the policy should clearly outline the steps to take in an easily understood manner. The best accident reporting plans avoid unnecessary steps and use clear, concise instructions for those involved.
4. Thoroughly Screen and Train all New Employees
The safety of your workplace is significantly affected by hiring practices. Any potential new hires should be thoroughly screened to ensure they comply with the company policies and culture. Any time a result raises a red flag, it should be investigated. Hiring a new worker with a history of risky behavior can put your other employees and your company at risk. Pre-employment screens often include one or more of the following screens:
- Background checks
- Credit reports
- Drug testing
- Reference checks
New employees should also receive training on all safety procedures, company policies, and accident reporting. Training should be updated as needed, such as when new equipment or tasks are introduced to a job description. All this information should also be included in employee handbooks that are regularly updated.
5. Implement a Return-To-Work Program
Return-to-work programs help get injured employees back into the workplace as soon as possible. These written agreements often work by finding alternative tasks for injured employees or offering light-duty assignments. In doing so, return-to-work programs reduce the amount of time people receive workers’ compensation benefits, which helps workers who are receiving partial salary payments while they are out of work.
These programs can be an enormous cost saver for companies, too. When implemented correctly, they help reduce or eliminate the need to hire and train temporary workers, lower insurance premiums, and improve overall productivity.
Most employers are required to provide workers’ compensation insurance to employees, often at a high cost. Some strategies that can help manage those costs include being proactive about claims, screening all potential new hires and having written safety, reporting, and return-to-work programs.