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Most employers in Pennsylvania are required to carry Workers' Compensation (WC) Insurance to pay medical expenses and lost wages if an employee is injured or develops an illness on the job.

The majority of WC claims are legitimate; however, Workers' Comp fraud is costing businesses billions of dollars every year. WC fraud occurs when employees fake an injury, exaggerate an injury, claim an injury occurred at work when it did not, etc.

If an employer doesn't want to pay more than they have to for WC Insurance, they need to be on the lookout for questionable claims. Here are 4 valuable tips:

Report All Injury Claims

Even if you suspect a claim is not legit, you must report all injury claims to your Workers' Compensation Insurance carrier. Failing to do so could result in hefty penalties.

To do this, complete an injury/illness report. Some employers have their own reporting forms, and others use forms from their WC carrier or state WC agency. You should have every type of workplace accident report form available to avoid legal issues. Fill out the form with the injured employee if possible or deliver the form to the doctor who attended the employee first.

Typical information requested on these forms include (but is not limited to) the following:

• Date of injury
• Where the injury occurred
• A description of the injury or illness
• When the employee became aware of the injury or illness
• The date the injured employee received AND returned the form

Inspect and Document

You can help any WC investigation by gathering information as soon as an injury occurs while the information is fresh in everyone's minds.  That includes surveying the scene of the accident, collecting information (such as talking to witnesses and writing down the details of the accident), and completing an incident report.

Try to determine the leading cause or causes of the accident and answer (in writing) the following questions:

• Were company rules and regulations followed?
• Were there any witnesses?
• Did something unique happen that caused the accident?
• Could the accident have been prevented?
• If it could have been prevented, why wasn't it?
• Is the risk still there?

As soon as possible, take photographs where the accident happened and any potential causes of the accident. Ask the doctor to document the state of the employee's injuries.

If there are witnesses, get the following information from them:

• Their name
• Their address
• Contact information
• A summary of what they saw

Let Your Claim Handler Know if You Believe a Claim is Questionable

The claim handler has experience and training in investigating WC claims – both legitimate and false claims, and they have the authority to deny a claim. However, you know more about your employees, your work environment, and the circumstances of an employee's claim than the claim handler.

If you feel a claim is questionable, you must let your claim handler know so that they can conduct a proper investigation.

Continue Communication

Once a claim is filed, the employer must continue to communicate with the carrier. Immediately forward any relevant information, such as medical documentation. Your claim handler may ask for additional information, such as the number of lost workdays, the RTW status, etc. If you want the claim resolved quickly, respond to claim handlers promptly.

How to Immediately Lower Workers' Compensation Insurance Costs:

If you want to lower your WC costs, work with an independent insurance agent like the pros at American Insuring Group. We can offer you lots of choices in WC insurance carriers. We'll make sure you get the right coverage at the right price. Give us a call today at (800) 947-1270 or (610) 775-3848 or connect with us online.

Every business in Pennsylvania with one or more employees is required to provide Workers’ Compensation Insurance to its employees – with very few exceptions. It’s the law. It doesn’t matter if those employees are full-time or part-time or even family members. Not having workers’ compensation insurance is a criminal offense. In Pennsylvania, you could face fines up to $2,500 and/or prison time.

Workers’ Compensation Insurance is designed to protect both the employee and the employer. There are two essential parts to WC insurance. The first part is coverage for medical expenses, rehabilitation costs, disability compensation, and lost wages when an employee is injured or becomes ill “in the course and scope” of their job, regardless of fault. It also pays death penalties to the family of an employee who is killed on the job.

According to the National Safety Council, the average cost of a WC claim in 2016-2017 was $40,051, with WC claims caused by injuries resulting from motor-vehicle crashes averaging $78,293. For many businesses, paying that amount of money out of pocket could put them out of business.

The second part of WC Insurance is coverage for employer liability. The first part of WC pays medical costs for work-related injuries and illnesses regardless of fault. However, if an employee feels the employer was negligent, they can file a lawsuit for additional damages in some instances. This is where the second part of WC – employer’s liability – kicks in. It helps employers pay for legal expenses, such as attorney’s fees, court fees, and settlements or judgments.

Types of Claims Employer’s Liability Insurance Covers

Third-Party Action

An employee who is injured on the job and receives workers’ comp benefits can’t sue their employer directly; however, they can sue a third party, such as the manufacturer of a piece of equipment that caused the injury. The manufacturer can then file a lawsuit against your company, creating a third-party action lawsuit.

Consequential Damage

An example of consequential damage would be a spouse who is injured as a result of caring for the injured employee.

Loss of Consortium

If an employee is severely injured or killed on the job, their spouse can file a lawsuit when the injury or death results in the loss of a family relationship.  

Dual-Capacity Suit

A dual-capacity lawsuit can occur if the employer and injured employee have more than one relationship. For example, if you manufactured a product that could have caused the injury, the employee can hold you liable.

What About Commercial General Liability (CGL) Insurance?

CGL covers bodily injury, personal injury, and property damage caused during business operations, as a result of one of your products, or on your business premises. Here are a few examples of when CGL will cover you.

• A customer falls and hurts themselves while in your restaurant.
• One of your employees accidentally causes a fire while working on the electrical panel in a customer’s home that causes damage.
• Someone files a libel or slander claim as a result of an ad that you placed.

One of the most important things to remember about Commercial General Liability Insurance is that it does NOT cover bodily injury to an employee. That is what Workers’ Compensation is for.

Protect Your Business While Saving Money

American Insuring Group offers both Workers’ Comp Insurance and Commercial General Liability Insurance, along with any other type of insurance you may need to protect your business. Plus, as independent agents, we compare the cost of coverage among many insurance companies to ensure that you get the lowest price on quality insurance protection. Give our experts a call today at (800) 947-1270 or (610) 775-3848 or connect with us online.

In the US, opioids are costing businesses an estimated $42 billion every year due to absenteeism, increased healthcare expenses, lost productivity, and increased Workers’ Compensation Insurance costs. Opioid addiction is the country’s biggest health crisis, and research shows that more than 50% of individuals who die from an opioid overdose had at least one job-related injury.

The opioid crisis is hitting construction workers harder than most. This comes as no surprise since construction workers are more likely to be injured on the job than many other occupations, and 25.3% of those injured workers were prescribed opioids to treat the pain caused by those injuries.

The result is that 15% of construction workers have a substance use disorder, while the national average is nearly half that at 8.6%, according to the National Safety Council.

What are Opioids?

Opioids – a type of painkiller prescribed for short-term relief of acute pain and cancer patients – include Hydrocodone (Vicodin®), Oxycodone (OxyContin®), Oxymorphone (Opana®), Morphine, Codeine, and Fentanyl.

What are the Risks of Opioids?

Here are a few risks with Prescription Opioid use, according to the National Association of Home Builders:

• Tolerance – People who take opioids quickly build up a tolerance to the drug and need to take a higher dosage to relieve the pain.
• Dependence – Even when opioids are taken as directed, people quickly become dependent on opioids, and withdrawal is horrible.
• Misuse – Some people build a tolerance and develop a dependence on opioids, which often causes them to take more than directed.
• Overdose – Being prescribed opioids is the most significant risk factor for accidental overdose and death.
• Addition – Individuals who have been prescribed opioids for long-term or chronic pain are 25% more likely to become addicted.
• Using it as a diversion – In 2017, at least 14% of high school students took prescription opioids “just for fun.
• Drug interactions – Mixing any prescription drug with alcohol or other drugs can be dangerous, and opioid is no different.

And it isn’t just the people addicted to opioids that are affected. The National Safety Council reports, “Substance use disorders affected 20.8 million Americans, almost 8% of the adult & adolescent population, when you include family members of those affected, nearly 1/3 of the US population is impacted by addiction. While 75% of these people are part of the workforce, most employers are unaware of the hidden costs associated with these problems.”

According to a Center for Construction Research and Training report released earlier this year, “65 unintentional overdose fatalities occurred on the job site in the construction industry in 2018 – a more than nine-fold increase from the seven recorded in 2011. The figure also represents a 35.4% climb from the 48 overdose deaths recorded in 2017.”

Save on Workers’ Compensation Insurance

The National Safety Council reports, “Companies and organizations of all sizes have an important role in promoting the health and safety of employees and managing risks in the workplace.” That includes opioid abuse. Create a safer workplace with a strong safety program that includes opioid education, and you create a workplace where employees thrive, and you enjoy lower Workers’ Compensation Insurance costs.

Want to save more on insurance costs? Give American Insuring Group a call at (800) 947-1270 or (610) 775-3848 or connect with us online.

Return-to-work (RTW) programs help employers by helping retain experienced workers, reduce turnover, and control Workers’ Compensation Insurance costs. RTW programs help injured employees by promoting physical and mental healing, retaining social connections, providing financial security, and helping them retain skills. RTW programs even help improve productivity and morale among co-workers. 

Studies show that injured employees who are out of work for more than six months have less than a 50% chance of returning to work and 80-90% of injured workers would rather get back to work than collect disability.

What is a Return-to-Work Program?

The goal of RTW programs is to get an injured employee working again as quickly as possible while they are still recuperating. That may mean providing the injured employee with temporary, modified, or transitional duties to get them back to work more quickly.

Unless you are a doctor, you probably don’t know how long it typically takes an injured employee to heal from an injury – whether it’s a simple sprain or a more serious injury. To develop an effective RTW, it is important to have some expectations as to recovery times. The good news is that someone has already figured that out for you.

Evidence-Based Medicine (EBM) Injury Guideline

An EBM injury guideline tool can help reduce uncertainty by providing recovery timeframe estimates, including the average and median amount of time it takes an injury to heal. It is based on the type of work an employee does – sedentary, light, medium, heavy, or very heavy work.

The two most well-known tools are the ODG guidelines from the Work Loss Data Institute (WLDI) and the MDGuidelines from the Reed Group.

The ODG (official disability guidelines) was released in 1995 as an “evidence-based disability duration (return-to-work) guideline,” by the WLDI. In 2017, WLDI became part of MCG Health.

MDGuidelines are researched and evaluated by an academic-based research team. According to the Reed Group, “MDGuidelines empower employers, insurers and providers to successfully improve health and financial outcomes.” It links several data sources – OSHA, CDC, the National Hospital Discharge Survey, and the worldwide ICD-9 coding system.

An Example

If an employee suffers from a partial rotator cuff tear, and they have a sedentary or light job, it should take a minimum of zero days and a maximum of four days for that person’s body to physically heal enough for them to go back to their full duties at work. However, if that same employee has a heavy or very heavy job, it should take a minimum of 21 days and a maximum of 85 days to recover and be ready to go back to their full work duties.

If you utilize an RTW program, that means that even an employee in a heavy or very heavy job with this type of injury should be back to work within four days – not doing their original work duties but doing sedentary or light duty.

What might surprise you is that more than 50% of people aren’t back to work within the maximum amount of time (85 days) required for physical healing of a partial rotator cuff tear. Understanding recovery time and instituting an RTW program will lead to benefits for your injured employee, his or her coworkers, and your bottom line.

Want to Save Even More on Workers’ Compensation Costs?

Give the experienced independent agents at American Insuring Group a call at (800) 947-1270 or (610) 775-3848 or connect with us online. Our independence means we're free to shop competing providers to get you the best deal. We’ll show you how to save on all of your worker's comp insurance needs in Philadelphia, PA and far beyond.

Workers' compensation coverage is mandatory for most employers in Pennsylvania, and according to the PA Department of Labor & Industry, “Employers who do not have workers' compensation coverage may be subject to lawsuits by employees and to criminal prosecution by the commonwealth.”

Although it may be a necessity, there are ways to lower the cost of your Worker’s Comp Insurance premiums. To lower your WC costs, you need to understand how your premium is calculated.

How is Your Worker’s Compensation Premium Calculate?

A simple formula is used to calculate your Workers Comp premium for each employee:

RATE x (PAYROLL/100) x EXPERIENCE MODIFIER = PREMIUM

RATE:

The rate is determined by an employee’s classification code, which is based on how likely that worker is to be injured on the job. The same classification code is given to employees in the same industry who perform similar functions. It’s no surprise that pilots, drivers, and construction workers – considered among the most dangerous jobs – have a higher rating than an office worker.

PAYROLL:

This number is derived from a projection of your payroll for the current period of your Workers’ Compensation policy.

EXPERIENCE MODIFIER:

Your modifier is based on your company’s loss history – how many WC insurance claims you have submitted - compared to the average loss history in your industry. A company is issued an experience modifier of one if their loss history is average. If your company’s loss history is better than average, you will receive a lower modifier. If your company’s loss history is worse than average, you will receive a higher modifier. The lower your modifier, the lower your insurance premiums.

5 Tips to Lower Your Workers’ Compensation Costs

Review Your Classifications

A classification error can cost you a lot of money. For instance, if your administrative assistant has accidentally been assigned the classification of a roofer, you’re going to pay a higher WC premium for that employee than you need. A roofer is more likely to be seriously injured on the job; therefore, the classification code of a roofer will be significantly higher than that of an administrative assistant.

To make sure you aren’t making any costly classification mistakes, it’s a good idea to have your insurance agent review any classification codes you aren’t sure of.

Create a Safer Work Environment

Fewer insurance claims result in a lower experience modifier, which results in lower WC premiums. How can you make fewer claims? Create a safer work environment. Your business should have a documented safety program that is enforced and embraced by all of your employees.

A small reduction in your experience modifier can result in a significant reduction in your WC premiums.

Plus, in Pennsylvania, employers can receive a 5% Workers' Compensation premium discount by forming and maintaining a workplace safety committee that meets state-established requirements for certification.

Maintain a Substance-Free Workplace

An employee who uses drugs or alcohol while on the job can cause injuries to both themselves and their co-workers. Make it clear from the time you interview a potential employee that you have a zero-tolerance for substance abuse.

One way to do that is requiring a pre-employment drug test, and depending on how dangerous a work environment is, random drug testing for all employees.

Establish a Return-to-Work Program

The longer a claim remains open, and an injured employee is off the job, the more it costs the employer. A return-to-work program gets employees back to work once they are medically ready. That could mean reduced hours or reduced duties that are approved by the injured worker’s physician.

Find Out If You Can Join a Group

In some states, employers that have been in business for a while and have a better-than-average safety history can get a group rating by joining a recognized group, which results in lower WC premiums.

How to Save EVEN MORE on Your Workers’ Compensation Insurance!

American Insuring Group specializes in Workers Compensation Insurance, so we can guide you through the process and provide suggestions for additional ways to save on your Workers’ Comp Insurance. As independent agents, we have the advantage of working with lots of insurance companies, giving you more ways to compare and save! Give us a call at (800) 947-1270 or (610) 775-3848 or connect with us online.

In an attempt to lower workers’ compensation insurance costs, some companies implement safety incentive programs. For example, everyone receives a $25 gift card if there are no injuries reported for thirty days. This type of incentive program is called a “results-based” program, and at least on paper, makes perfect sense.

According to one study, between 1991 and 2001, companies with a safety incentive program saw a 44.16% reduction in the mean lost-time workday injury rate.

Again, this makes perfect sense; a safer workplace means fewer injuries and lower WC costs, so a company with no reported injuries for thirty days is a safer workplace, right? Maybe. The biggest flaw found in a results-based incentive program is that it can encourage underreporting.

A 2010 survey conducted by the Government Accountability Office, found that approximately 75% of manufacturers in the US had safety incentive programs that could potentially affect workers’ reporting of injuries and illnesses.

Let’s say on day twenty Joe Smith incurs an injury, but he doesn’t want to blow the $25 gift card for all of his coworkers, so he decides (or is pressured by coworkers) to wait to report the incident. When he does finally report that injury ten days later, there could be complications resulting in a more severe injury and higher medical costs.

Plus, if the injury is caused by an unsafe situation, another employee could be injured before the initial injury is reported and the hazardous situation remedied. Either way, you’re looking at higher medical costs and higher workers’ compensation costs.

That doesn’t mean that safety incentive programs don’t work. They can motivate employees to pay attention to safety and to work more safely, but they have to be done correctly. If the incentive program focuses on the incentive and not actual safety, it can interfere with creating a safer work environment.

Here are six tips to help you create an effective safety incentive program to help lower your workers’ compensation costs:

An Incentive Program Has to Be Part of a Comprehensive Safety Program

Some companies try to create an incentive program without having a comprehensive safety program – including safety training, accident investigations, a return-to-work program, etc. - in place. An incentive program is a way to encourage employees to engage in a company’s safety program and safe actions that it creates. 

Consider “Process-Based” Incentives

As discussed earlier, a results-based incentive program can result in unreported injuries, which is not reducing accidents or injuries. Instead of rewarding employees for the number of days without an incident, try rewarding positive, proactive behavior such as attending safety meetings, wearing PPE, scoring well on a safety training quiz, or suggesting ways to create a safer workplace. 

Provide Genuine and Meaningful Incentives

You need to find out what motivates your employees, and you need to offer a meaningful incentive that is worth achieving. Not everyone is motivated by money. Some would rather be recognized for doing a good job.

Incentives can include a pizza party or exclusive T-shirts with the company logo or an annual recognition dinner where employees on every level mingle, and top management presents awards to employees who have practiced safe work practices.

Award Incentives Often and to Many Employees

Workplace safety is a year-round activity. If you only award employees once a year, it’s easy to forget about safety three or four months into a program. Instead, offer frequent rewards – quarterly, monthly, or even weekly.

Everybody wins when you offer a safe work environment, so your incentive programs should take that same approach and award everyone – from top management to individual employees and from employees who already work safely to those who need encouragement to work more safely.

Get Buy-In From Upper Management

Upper management is footing the bill, so they need to understand the goals of the program and how it will progress. It takes a while to see a decrease in injuries and the resulting lower WC costs. 

Plus, there is usually an upfront investment required for things like signs, results boards, and even time. As the program progresses and employees become more familiar with the program, those costs typically decrease.

But if upper management doesn’t see immediate results, they could withdraw their support if they don’t understand the process.

And in order to create a culture of safety, upper management needs to buy into your company’s safety program, including incentives.

KISS

Keep it Simple Stupid! Don’t make an incentive program so complicated that your employees don’t understand what they need to do in order to receive the award. If it’s too complicated, a safety incentive program could backfire by lowering employee morale.

Providing a safe working environment is every employer’s responsibility. The good news is that efforts to create a safer workplace – such as safety incentive programs – can also help improve your bottom-line.

Get the Best Price on Workers’ Comp insurance

The experienced independent agents at American Insuring Group are committed to getting you the very best price on quality workers’ compensation insurance protection. Give us a call at (800) 947-1270 or (610) 775-3848 or find us online.

The majority of workers’ compensation insurance claims are legitimate, and if an employee is injured on the job, they are entitled to the medical care and indemnity benefits stated in the workers’ compensation statutes. Unfortunately, there are also a number of fraudulent workers’ compensation claims every year.

Workers Compensation Insurance Fraud Statistics

The National Insurance Crime Bureau (NICB) estimates that workers’ compensation insurance fraud costs the insurance industry $7.5 billion every year, which in turn drives up the cost of workers’ compensation premiums. This doesn’t even take into account the cost of replacing the “injured” employee, training a new employee, overtime, and even a decrease in employee morale and productivity.

“Workers’ comp fraud is a large crime in America today,” according to the Coalition Against Fraud Insurance. “Scams are forcing premiums higher — draining business profits and costing honest workers their pay and jobs.”

Tips for Investigating Workers Comp Insurance Claims

Yet, many employers don’t investigate workers’ compensation claims properly. There is one simple thing every employer can and should do immediately following an accident or injury: collect written incident reports from the injured employee and any witnesses.

The injured employee should provide a written description of the incident including details of the accident, what caused the injury, the nature and scope of the injury, and what the employee thinks could be done to prevent the accident from happening again because.

Here’s why:

1. Immediately following an incident, the employee should be able to recall the accident or injury more accurately than they could months or years later.
   
   
2. Having the details of the accident in writing will discourage the employee from embellishing the details later, and having documentation of exactly which body parts were injured, limits the employee’s ability to add additional body parts to the claim at a later time. Tales do tend to grow taller on down the line.
   
   
3. Often, if a claim is questionable, the adjuster will take a recorded statement from the employee. A written report allows them to compare the two reports to look for deviations. In this interview, the adjuster may also ask if the employee has any prior claims, accidents, and any prior injuries to the same body part.

Keeping the WC Claims Process Honest

The bottom line is that knowing that an employer has the details of the incident written in the employees’ own words goes a long way to help keep an injured employee honest.

Obtaining a written report from every witness immediately following the incident will help provide additional information about the accident and the extent of the injuries. Employers should be cautious of any accidents that have no witnesses or that the only witnesses are friends of the injured employee.

The employee’s supervisor or someone familiar with the work process should review the reports to confirm the accuracy of the information, and those reports should be given to the workers’ compensation adjuster. The employer should also provide information to the adjuster about any previous workers’ compensation claims, any other accidents or injuries the employee has incurred in the past, and any strenuous activities, sports, or hobbies the employee participates in.  

Create a Standard Protocol for Investigating Workers Comp Accidents

Having an established protocol for investigating accidents can help ensure that the proper steps are taken each time. It’s important that you react quickly to an accident or injury, capture the details quickly, and take the right actions to investigate the claim. Doing this will help limit the ability of dishonest employees to exploit legitimate workers’ compensation claims and help you keep workers’ compensation costs down.

How to Get the Best PA Workers Comp Insurance Coverage

To learn more about protecting your company against WC insurance fraud or your workers compensation insurance coverage options, you can reach us via our Contact Page or call American Insuring Group at (800) 947-1270 or (610) 775-3848.

Our independent agents are ready to help you get affordable insurance protection. We'll drive down your cost by comparing prices and coverages among lots of competing WC insurance carriers. Don't delay - contact us today and start saving!