HR Hero Line

Ways Employers Can Reduce Workers’ Comp Costs

The gloom of our current economic circumstances should inspire everyone to look for ways to cut costs and streamline operations. One place businesses can start might be the administration of their workers’ compensation program, where expenses can rapidly get out of hand if employers aren’t careful. Here’s a brief checklist of things to look for.

Workers’ comp checklist

Make sure your coverage is adequate and sufficiently inclusive.

  • Confirm your company has an insurance policy in place or are properly self-insured.
  • Review your business’ coverage to be sure that employees who have been excluded from coverage as so-called independent contractors are protected under your policy.
  • Make sure your coverage reaches across state lines as necessary.

Audio Conference: Cutting Workers’ Comp Costs: How to Avoid Premium Traps and Other Expensive Mistakes

Thoroughly investigate all injuries and accidents.

  • Request details and fill in the gaps in every report before the employee signs it.
  • Get the “who, what, when, where, and how” answered as soon as possible.
  • Identify potential witnesses, including anyone who was or might have been at the scene.

Have an effective return-to-work plan or program that establishes proper standards for getting the employee back to work.

  • When an employee can return to work with no restrictions, return him to his preinjury job.
  • When an employee can return to work but only with restrictions, evaluate and consider modifications to his preinjury job that will permit him to return.
  • If you are unable to modify the preinjury job, consider making an alternative placement or creating a light-duty position.

Remember the impact of the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and any other law that might affect the situation.

  • Workers’ comp injuries often result in missed work that can trigger an employer’s FMLA obligations (assuming, of course, that it meets the 50-employee test for coverage), so be sure to initiate your company’s FMLA process. (HR Hero Line article – “10 Key Changes in New FMLA Regulations“)
  • Workers’ comp injuries can also be considered disabilities that require emploeyrs to consider reasonable accommodation under the ADA. Therefore, engage in an “interactive process” when necessary to determine if your company has an appropriate position for an employee with permanent restrictions resulting from a work injury. (HR Hero Line article – “More workers protected under ADA Amendments Act“)

Treat employees on workers’ comp fairly and equally to avoid retaliation or interference claims.

  • Don’t target an employee for filing a workers’ comp claim or indicate in any way that you’re angry or disappointed that she filed a claim.
  • Don’t use the filing of a claim or the resulting medical issues as a “last straw” for a problem employee.

Audio Conference: Workers’ Comp Claims: The 10 Biggest Mistakes Employers Make

On the other hand, don’t offer favored treatment to employees who have made workers’ comp claims.

  • If an injured employee exhibits unacceptable behavior in the workplace, it should be addressed and handled like any other similar situation.
  • If an injured employee has attendance or tardiness issues that aren’t excused by medical documentation, deal with it as you would for any other employee.
  • If an employee has been accommodated and is still not producing up to ordinary standards, correct him as you would any other unproductive employee. Reasonable accommodation doesn’t require you to accept substandard performance. However, remember that reduced schedules must entail reduced expectations and that performance expectations for light-duty work must be tailored to fit the job.

Keep the lines of communication open.

  • Talk with the injured employee about her recovery progress, problems that may arise, and possible job changes that can be considered as her medical condition improves.
  • Keep managers and supervisors up to date on the employee’s progress and the status of her claim.
  • Be in constant contact with the insurer or third-party administrator regarding strategy and developments in the claim.

Consider the effective use of an independent medical exam (IME).

  • An IME should be considered if the injured employee isn’t progressing satisfactorily.
  • The IME shouldn’t be used as a means of obtaining information about medical conditions not connected with the workers’ comp claim.

Audio Conference: AMA Guides, 6th Edition: Critical Update for Attorneys and Workers’

Keep up to date with the employee’s treatment and progress.

  • Check in with the insurer or administrator about long-term or ongoing medical treatment beyond 10 to 12 weeks. Length of treatment may be a sign that the medical condition is a long-term issue and that other plans may have to be considered.
  • Know the type and typical duration of the employee’s medical treatment.

Audio Conference: Take Control of Workers’ Comp: 20 Ways to Close Old Claims

Emphasize safety, training, health, and wellness.

  • Evaluate your company’s premises continuously to ensure safety and vigilance in all work areas (e.g., keeping aisles clear, rugs secure, spills cleared).
  • Make sure employees receive proper training and refreshers (e.g., proper lifting techniques, systems process training, safe-handling instructions).
  • Consider an effective health and wellness incentive program.

Bottom line
Workers’ comp claims can be horrendously costly and time-consuming. Why not take some time to fine-tune your business’ system before the next claim is filed? It might really pay off!

State-specific newsletters for Workers Comp professionals