Pennsylvania law mandates that every employer (with very few exceptions) provides Workers' Compensation Insurance for their employees.
The cost of this insurance is based on several factors, such as payroll, work risk, and work history. The National Academy of Social Insurance reports the average cost of WC insurance in PA in 2018 was $1.35 per $100 of payroll.
The good news is that there are many steps employers can take to lower Workers' Compensation Insurance costs. Number one is creating a safer work environment because fewer claims mean lower WC Insurance costs. Here are five additional tips to help lower your Workers' Compensation costs.
Immediately Report Injuries
PA law requires that workplace injuries be reported promptly, and reporting injuries quickly also provides many benefits to the employer.
- A delay in treatment can worsen the injury, thereby extending recovery time and increasing days out of work.
- It's harder to investigate a claim, determine compensability, and identify fraudulent claims that are not reported promptly.
- If an employee reports an injury and the employer delays the claim, it can create distrust in the injured employee and other employees.
- It's the law. Employers are required to file all WC claims within 21 days.
Communicate with Injured Employees
Regular communication helps maintain good relationships by letting injured employees know that you are concerned about their well-being and recovery and that they are valued employees. Failure to do so can cause an unhappy worker (which can extend to un-injured employees), and unhappy workers are more likely to hire an attorney. Regular discussions also help keep employers apprised of an injured employee's medical status so they can get them back to work as quickly and safely as possible.
Get Injured Employees Back to Work as Quickly and Safely as Possible
Getting injured employees back to work – even in a limited capacity – benefits both the employer and the injured employee. Here are the benefits of a return-to-work program, according to SHRM:
- Increased productivity.
- Reduced costs due to overtime pay as other workers fill in.
- Reduced administrative costs associated with filling the position with temporary help.
- Controlled workers' compensation claim costs.
- Reduced short-term disability (STD) and long-term disability (LTD) costs.
- Reduction in absenteeism and days away from work.
Employees benefit from an RTW program because:
- They maintain some or all of their earnings.
- They retain their skills and are productive contributors to the organization.
- They are likely to return to their pre-injury jobs more quickly.
- They maintain social connections and sense of purpose with their work routine.
Analyze
One way to lower your WC costs is to improve your loss history. One way to improve your loss history is by analyzing a loss run report – a report issued by your current insurance provider that shows your company's claim activity.
Loss Run Reports provide a great deal of information, such as the date of each claim, a description of each claim, the amount paid to the insured, and whether or not the claim is closed. Insurance companies use the information from these reports to determine how risky a business is to insure, which can affect the premium you pay or even determine if an insurance company will issue or renew your policy.
Use this information to lower your insurance costs. Here's how:
- Is the information accurate?
- Are there common injuries that you can minimize?
- If you have a high number of claims from one individual or new hires, can you improve safety training?
- If you have a lost-time claim higher than the average 20-25%, can you improve your return-to-work Program?
- If you discover a pattern of long reporting times, can you provide additional safety training for managers?
- If you see a large number of litigated claims, could it be a lack of communication, a bad business culture, or disgruntled employees?
Create a Wellness Program
Healthier employees lead to happier, more productive employees, fewer days away from work, and lower workers' compensation costs. A Duke University Medical Center analysis reported that obese workers filed twice as many WC claims, missed 13 times more workdays from a workplace injury or illness, and incurred seven times higher medical costs than non-obese workers.
Indiana State Department of Health reported, "Workers' compensation costs for a smoker averaged $2,189 compared to only $176 for a nonsmoker." And one study found that "smokers are absent from work for sickness as many as 6.16 days per year on average, compared with 3.86 days for those employees who never smoke."
A wellness program can help improve your employees' lives and your Workers' Compensation costs.
Lower Workers' Compensation Insurance Costs
Work with one of the experienced and trusted agents at American Insuring Group. We work with more than 25 competing insurance carriers to find the best insurance value to meet your specific situation.
Give us a call today at (800) 947-1270 or (610) 775-3848, or connect with us online.
