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Top 10 Pennsylvania Workers’ Comp FAQs

Posted by David Ross on Sat, Feb 05, 2022

We Answer Workers Compensation Insurance Questions for businesses in Philadelphia, Pittsburgh, Reading, Lancaster, Erie, Allentown, Harrisburg, and throughout PA and more.We get a lot of questions about Workers’ Compensation Insurance. Here are answers to the most frequently asked questions.

1. Do I need to carry Workers’ Compensation (WC or Workers Comp) Insurance? In Pennsylvania, whether you have one employee or one hundred employees, full or part-time employees, or your employees are family, you are probably required to have Workers’ Compensation Insurance. There are very few exceptions, and not having it can lead to lawsuits and even criminal prosecution.

2. What does Workers Comp Cover? Workers Comp helps cover health care expenses, ongoing health care expenses, disability payments, death benefits, and permanent injury payments (such as the loss of a body part) when an employee suffers a work-related injury or disease. It also helps protect your business against lawsuits related to the injury.

3. What is not covered by Workers’ Compensation? Some things are not covered under WC in Pennsylvania:

  • Activities not related to work
  • Illegal use of drugs
  • Intentional wrong of employee
  • Intoxication
  • Reckless indifference
  • Self-inflicted injury
  • Violation of law resulting in an injury

4. How are Workers’ Compensation rates calculated? Your Workers’ Compensation premium is based on the following formula: WC Premium = Classification Code Rate X Experience Modifier X payroll/$100.

5. What are WC Classification Codes? There is a 3-digit classification code for every type of job in Pennsylvania. It is based on the likelihood of that employee being injured on the job, and it helps determine your WC premium. Typically, the more risk of injury, the higher your WC costs.

6. What is an Experience Modifier? Your experience modifier compares the history of your losses to what is typically expected in a class similar to your company. It is based on the following:

  • Number of Claims
  • Cost of Claims
  • Frequency of Claims
  • Severity of Claims
  • Closed vs. Open Claims
  • Claims History of other businesses in your industry
  • Years in business
  • Number of employees
  • State minimums

The lower your experience modifier, the lower your premiums.

7. Where can I purchase WC Insurance? In PA, there are four ways you can purchase WC insurance:

  • Insurance agent – As independent agents with experience specifically in WC, the agents at American Insuring Group compare the cost of your WC with several carriers and ensure you pay the lowest price possible for WC and all other insurance.
  • Insurance Carrier – More than 300 private sector insurance carriers offer WC policies.
  • Apply for self-insurance status – Larger businesses operating for three or more years and are financially healthy can apply for approval to individually self-insure.
  • State Workers’ Insurance Fund (SWIF) – SWIF is required to provide coverage for all businesses, particularly those having trouble obtaining coverage

8. What is WC fraud? You, an employee, or a health care provider can commit Workers’ Compensation fraud, which can increase your WC costs. Examples of WC fraud include the following:

  • Misclassification of an employee
  • A faked injury
  • A medical bill for a service that was not performed

9. What is a Return-to-Work Program? A Return-to-Work (RTW) program is designed to get an injured employee back to work as quickly and safely as possible, even if it’s a modified schedule or duties. Studies show that RTWs save employers on medical costs, lost time days, and workers’ compensation insurance costs. These programs can even reduce the number of lawsuits, wage replacement costs, and productivity losses.

10. How can I lower my Workers Comp Insurance costs?

Workers’ Compensation insurance may be mandatory in PA, but there are many steps your business can take to lower your WC costs:

  • Institute a documented safety program
  • Have a Return-to-Work program
  • Work with an Experienced Workers’ Compensation Insurance agent.

The independent agents at American Insuring Group have been helping businesses get the right WC coverage for years. And as independent agents, we compare the cost of that coverage among many companies to ensure you pay the lowest premium for that coverage.

Give American Insuring Group a call today at (800) 947-1270 or (610) 775-3848, or connect with us online and start saving on all your insurance needs!

Tags: Workers Compensation Insurance, Return-To-Work Programs

5 Tips to Lower Workers' Compensation Costs

Posted by David Ross on Sat, Nov 13, 2021

Ways-to-Lower-WC-Costs-800Pennsylvania 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.

Tags: Workers Compensation Insurance, workers comp costs, Return-To-Work Programs

Reduce WC Costs with Designated Health Care Providers

Posted by David Ross on Sat, Oct 09, 2021

Reduce Workers Comp Costs with Designated Health Care ProvidersOne way to reduce the cost of Workers’ Compensation Insurance is by managing medical expenses. One way Pennsylvania employers can manage medical costs is by providing a list of designated health care providers.

The PA Workers’ Compensation Act allows employers to establish a list of designated health care providers and states that injured employees “must seek treatment for the work injury or illness with one of the designated providers for 90 days from the date of the first visit.” Without this list, injured employees can seek medical treatment from any provider.

Creating a list of good health care providers for your injured employees not only helps you manage health care costs and lower WC insurance; it also helps ensure that your injured employees receive the best care possible. First, however, there are guidelines providers must follow.


      • The list must be posted in an area where employees will see it.
      • There must be at least six providers on the list.
      • Three of the providers must be physicians.
      • A maximum of four providers can be coordinated care organizations.
      • The list must include the providers’ name, address, telephone number, and area of medical specialty.
      • Providers must be geographically accessible.
      • Providers’ specialties must be appropriate for anticipated work-related injuries and illness of employees.
      • If a particular specialty is not on the list and the specialty care is reasonable and necessary for treatment of the work injury, injured employees are permitted to choose their own health care provider.
      • Employers must state if any of the providers are employed, owned, or controlled by the employer or its WC insurance provider.
      • Employers must provide a clearly written notice to all newly hired employees regarding their rights and responsibilities, which every employee reads, signs, and returns to the employer.
      • When an injury occurs, the injured employee should read and sign another acknowledgment of their rights and responsibilities.
      • Employers can’t direct injured employees to any specific provider on the list and must allow employees to switch from one provider to another provider on the list.
      • In an emergency situation, the injured employee is not required to seek medical treatment from a provider on the list. But once the emergency is over, they must use a provider on the list.
      • Injured employees are permitted to change physicians after 90 days, but they must give notice of the change to the employer and the insurance carrier within five days of the first treatment.

Additional Tips to Save on Workers’ Compensation Costs

WC Insurance covers the cost of medical treatment and lost wages for employees who are injured on the job and helps protect businesses against lawsuits filed by injured workers. In Pennsylvania, Workers’ Compensation Insurance is mandatory for almost every employer, whether an employee is full-time or part-time or even family.

However, there are steps - besides creating a designated health care provider list – businesses can take to lower their WC costs. Here are just a few.

    1. Institute a Documented Safety Program – Several studies have found that every dollar invested in preventing workplace injuries can yield a $2 to $6 return on investment.

    2. Have a Return-to-Work (RTW) Program – Not only can RTW Programs lower costs related to employee injuries, but they can also help keep injured employees engaged, lower the risk of litigation claims, reduce employee turnover, and increase productivity.

    3. Work with an Experienced Workers’ Compensation Insurance AgentThe agents at American Insuring Group have many years of experience in Workers Comp Insurance and can help guide you through the process. Plus, as independent agents, we check with several insurance companies to make sure you pay the lowest rate for all of your insurance needs.

→ Start saving on WC and other insurance costs by giving American Insuring Group a call today at (800) 947-1270 or (610) 775-3848, or connect with us online.

Tags: Workers Compensation Insurance, PA Workers Compensation Insurance, workers comp costs, Return-To-Work Programs

Reviewing Your Loss Run Report Can Lower WC Insurance Costs

Posted by David Ross on Sat, Jul 17, 2021

Reviewing Your Loss Run Report Can Lower WC Insurance Costs in the Lehigh Valley, Philadelphia, Erie, Pittsburgh, Lancaster, Reading and throughout Pennsylvania.In Pennsylvania, almost every employer is required to carry Workers’ Compensation Insurance for their employees; however, they are not required to pay more than they have to.

There are many ways employers can lower WC costs - creating a safer workplace, working with an insurance agent – like those at American Insuring Group - who specializes in Workers’ Comp, and reviewing your company’s WC Loss Run Report at least once a year.

What is a Loss Run Report?

A Loss Run Report – issued by your current insurance provider - shows your company’s claim activity for the policy period. You can request this report for most types of business insurance – including Workers’ Comp, and most states require the company to provide the report within a certain amount of time.

Loss Run Reports list the date of each loss and claim, a brief description of each claim, the amount paid to the insured, and whether or not the claim is closed. You can think of it like a credit report or report card for insurance companies. They use the information in the report to determine how risky a business is to insure, which can affect the premium you pay for insurance or even if an insurance company will issue a policy or renew a policy for your business.

You can use the information to lower your insurance costs and even improve other areas of your business.

What Should You Review on a Loss Run Report?

Accuracy

At the very minimum, you should check the Loss Run Report for accuracy. Ensure that you recognize every claim listed on the report and that the information listed is correct. Invalid claims or incorrect information could impact how much you pay for insurance.

Common Injuries

The report also lists the most common and frequent injuries and where they occurred. You can use this information to improve safety and lower the number of injuries within your company, reducing your insurance (and other) costs.

Claimants

Suppose you notice a high number of claims from one individual or specifically from new hires. In that case, you can talk to them about safety or adjust your safety training to help reduce the likelihood of additional claims.

Lost Time

Lost-Time claims indicate that compensation was paid to an injured worker who cannot perform their job due to the injury. The national average for lost-time claims is between 20 and 25 percent. If you notice a high percentage of lost-time claims, you may want to take a look at your Return-to-Work program. There are many benefits for both employee and employer to get injured employees back to work as soon as possible – even if it’s in a modified capacity. 

Reporting Time

Injuries should be reported within 24 hours whenever possible so the injured employee can receive quick and proper treatment. If you notice a pattern of a long time between when an injury occurs and when it is reported, you may need to look at additional safety training for management.

Open Claims

The longer a claim is open, the more it costs you, so your goal should be to close claims as quickly as possible. Any open claims should be monitored closely.

Litigation

A large percentage of litigated claims could be a red flag. It could be an indication that employees are dissatisfied with their employer or their job. If you see a large percentage of litigated claims on your loss run report, you may want to consider how well management communicates with employees, your business culture, or other areas that can cause discontent among employees.

How to Lower Your Workers’ Compensation Insurance Costs

They say “knowledge is power,” which is certainly true when it comes to lowering your Workers’ Compensation costs. If you don’t know there’s a problem, you can’t fix it. A Loss Run Report can help identify potential issues that you can address to improve your company’s bottom line.

Working with an independent agent with experience in WC insurance – as the agents at American Insuring Group do – is another way to lower your WC costs. We will compare costs and options among competing worker's compensation insurance carriers to be sure you get the right insurance at the best price. Call today at (800) 947-1270 or (610) 775-3848, or connect with us online.

Tags: Workers Compensation Insurance, workers comp, workers comp insurance, workers comp costs, Return-To-Work Programs

Transitional Duty Helps Businesses Save on Workers' Compensation Costs

Posted by David Ross on Sat, May 15, 2021

Lower Your Workers Comp Insurance Costs with a Transitional Program in Philadelphia or elsewhere in PAA Return-to-Work (RTW) Program can help lower Workers' Compensation costs. Injured employees who can return to work – even if they're on modified or transitional duty – recover more quickly and feel more productive and connected with their workplace. Employers benefit by reducing the likelihood of litigation and – of course – controlling Workers' Compensation claim costs. 

What are Modified and Transitional Duty?

Sometimes injured employees can come back to work for what is called modified duty. Modified duty allows injured employees to perform their original duties with some modifications. With modified duty, the PA Department of Labor & Industry states, "Every effort will be made to place the employee in the most productive assignment available." Modified duty may include a shorter workday or providing a chair for the injured employee, so they can sit while working. 

However, sometimes restrictions imposed by the treating physician are too much to allow an injured employee to return to their regular duties, which is where transitional duty comes into play. With transitional duty, an employer is looking for something within the company that the injured employee can perform and still meet the physician's restrictions. 

For example, you may move a factory worker into the office to help – maybe scanning documents or answering phones. The idea is that the injured employee is gradually transitioned back to their original duties. 

The Key to Successful Transitional Duty

The key to successfully transitioning an injured employee back to their regular job is communication, so weekly meetings are essential. Those meetings should be held by a transitional duty coordinator or the supervisor handling the injured worker's RTW. Here are the benefits of weekly meetings. 

  1. Weekly Meetings Keep Injured Employees Connected

Humans are a social species, so it's essential that employees performing transitional duties feel connected to their supervisors and co-workers. Weekly meetings boost morale, enhance self-worth, and make injured employees feel like valued members of the team. 

  1. Weekly Meetings Help Transition Injured Employees More Quickly

Weekly meetings allow the employer and injured employee to work together so the employee can transition into other duties and move closer to their regular responsibilities more quickly. 

Injured employees should bring any changes in their medical condition, such as medications, work restrictions, and physician's recommendations to the weekly meetings. This allows the employer to determine if an injured employee is building strength or capabilities. 

The employee can discuss concerns they have or any obstacles they foresee in transitioning into new duties. Together, the employee and employer can address those needs and discuss options. Sometimes a simple change – such as an ergonomic chair – can allow an injured employee to transition into a duty closer to their regular work. 

The Weekly Meetings

During the weekly meetings, make sure that the injured employee feels like a valuable part of the team. Allow them to be a part of the conversation that will allow them to return to their regular duties. 

Here are a few tips:

  • Send a letter to the injured employee's home address informing them of the meeting's time and date. If possible, send an email reminder of the meeting.
  • If the injured employee is unable to drive due to the injury, provide transportation to the meetings.
  • Make sure you follow all state and federal regulations, such as ADA, FMLA, and COBRA.
  • Allow for an open dialogue so the employee feels comfortable expressing his or her concerns.
  • Ensure that the employee is fit to perform new transitional duties safely. 

Save on Workers' Compensation Insurance

Another way to save on Workers' Compensation Insurance costs is to work with an agent who has experience with WC. American Insuring Group has specialized in WC for many years and can help your company save on Workers' Compensation costs. Give us a call today at (800) 947-1270 or (610) 775-3848 or connect with us online.

Tags: Workers Compensation Insurance, workers comp, PA Workers Compensation Insurance, workers comp costs, Return-To-Work Programs

How Pre-Employment Tests Can Lower WC Insurance Costs

Posted by David Ross on Sat, Jan 16, 2021

How to Use Pre-Employment Tests to Lower WC Costs in Reading, Philadelphia, Lancaster, Allentown, Pittsburgh and throughout Pennsylvania and elsewhere.Workers’ Compensation Insurance (WC) is designed to protect employers and employees from financial loss when an employee is injured on the job or becomes ill from a work-related cause.

It bears repeating that WC is meant for WORK-RELATED illnesses and injuries.

But consider this, according to AARP, more than 19 million working Americans between the ages of 21 and 64 have some physical limitation that could affect their ability to perform certain tasks. According to the CDC, the most common type of disability (one in seven adults) affects mobility, and with age, disabilities become more common.

That means there’s about a 10% chance that a potential new-hire could have a pre-existing impairment – knowingly or unknowingly - that could put them at risk for an injury.

While that person should still be able to get whatever benefits they are entitled to, his or her employer should not be responsible for paying for an injury caused by a condition the employee had before they were hired. But how would you know if a potential hire has a pre-existing impairment? A pre-employment human performance evaluation (HPE)!

The Americans with Disabilities Act allows employers to physically and medically evaluate their workers at all stages of their employment. After an individual is offered a job, the employer can make the job contingent on several things, such as a background check, drug test, and pre-employment testing.

Keep in mind that The Society for Human Resource Management (SHRM) cautions, “Pre-employment tests need to be selected and monitored with care; employers run the risk of litigation if a selection decision is challenged and determined to be discriminatory or in violation of state or federal regulations. Tests used in the selection process must be legal, reliable, valid, and equitable, and HR professionals need to stay aware of any developing trends.”

What is a Pre-Employment Human Performance Evaluation?

The pre-employment HPE (also called a pre-placement test) is a standardized test often conducted in a physical therapy or occupational medical clinic. It helps companies get an overview of the prospective employee’s overall health status and make better choices when hiring new candidates.

An HPE can do the following:

  1. Assure employers that the prospective employee is physically able to perform a job safely
  2. Protect employers from WC injury claims that are not work-related, but the result of a pre-existing impairment
  3. Protect employees from injuries while performing jobs they should not be doing due to a pre-existing impairment
  4. Protect the employees’ co-workers

According to Concentra, a national health care company, information commonly collected during this test includes:

  • A review of the workers’ medical and occupational history
  • A medical exam
  • An evaluation of functional tasks such as lifting, carrying, pushing, and pulling

The test can also be used to establish a baseline so an employer can monitor any changes in the employee’s health over time and use it for future reference in the event of an injury. This information often shows that only part of an employee’s injury is caused by his or her current work.

For example, an HPE may reveal that a worker has a 5% impairment in his or her shoulder. If that employee is injured and is determined to have a 7% impairment, the employer would only be responsible for the additional 2% impairment under Workers’ Compensation insurance.

Employers don’t want to pay for injuries or illnesses that were not caused on the job, and a pre-employment HPE – that follows all legal requirements – can help minimize that risk.

Lower Your Workers’ Compensation Insurance Costs!

Another way to save on WC costs is to work with one of the experienced agents at American Insuring Group. We specialize in WC insurance, and we're independent agents, which frees us to quote lots of competing insurance providers so that you get the right coverage at the best price.

Call us today at (800) 947-1270 or (610) 775-3848 or connect with us online.

Tags: Workers Compensation Insurance, PA Workers Compensation Insurance, workers comp costs, Return-To-Work Programs

Is a Workers Comp Insurance Loss-Sensitive Plan Right for You?

Posted by David Ross on Sat, Apr 18, 2020

save_workers_comp_insuranceMore and more employers are moving away from the traditional guaranteed Workers’ Compensation Insurance plans into loss-sensitive plans. Loss-sensitive plans can help some businesses save money, but for others, a loss-sensitive plan can cost a company more than a guaranteed plan.

How do you know which type of Workers’ Compensation plan will yield the highest return for your business? Here are three tips to help.

Understand the Different Types of Loss-Sensitive Plans Available.

Retrospective Rating Plans

The Insurance Journal defines a retrospective rating plan as a plan “in which the final premium is based on the insured’s actual loss experience during the policy term, subject to a minimum and maximum premium, with the final premium determined by a formula which is guaranteed in the insurance contract.”

With a retrospective rating plan, an employer pays a standard premium - a combination of a basic premium and a loss projection - at the beginning of the policy year. After eighteen months, the insurer uses the employer’s actual losses to calculate a retro premium. If the retro premium is lower than the standard premium, the employer receives a premium from the insurer for the difference. If the retro premium is higher than the standard premium, the employer has to pay an additional premium.

Typically, there is a cap on the additional premium (usually 1.20 times the standard premium) an employer must pay.

Large Deductible Plan

A large-deductible plan is basically a guaranteed WC plan that includes the employer self-insuring part of its compensation losses with a large deductible. With this type of plan, the employer pays a lower premium but is then required to set up an escrow fund and reimburse the insurance company for claims up to a certain dollar amount.

Captives

The Insurance Journal defines captives as “any insurance company that is owned by one or more organizations, and that insures only the owners of the company.” There are typically two types of captives used for WC. One is a single owner, where the company that is insured has complete control over everything, including investments, operations, etc. The other type is a rent-a-captive, which is owned and run by an organization other than the insured, such as a broker, a fronting insurance carrier, etc.

Understand Your Risk Tolerance

The advantage of a guaranteed Workers’ Compensation Insurance plan is that your premiums are very predictable. You can put it into your budget and not worry about it. The cost of loss-sensitive plans can vary significantly. You can include an estimate in your budget, but the actual cost can vary, along with the frequency and timing of payments.

IF your company has a low tolerance for risk, a guaranteed plan may be a better choice. However, if you’ve created an effective safety program, provided all of your employees with appropriate safety training, have a robust return-to-work program, and have minimized workplace injuries, your loss projections should be reasonably accurate. Therefore, you may want to consider taking on more risk with a loss-sensitive plan. You’ve reduced risk within your organization, and a loss-sensitive plan could provide a higher return on your investment.

Consider the Financial Impact of Each Type of Plan

You should understand the impact each type of plan will have on your cash flow and the tax implications of each. A guaranteed cost plan may cost you more; however, it provides consistent payments, and you know how much you’re going to pay. You can put the cost of your premiums into the budget and not worry about it.

However, a loss-sensitive program can offer cash flow advantages because you’re paying for claims as they occur rather than paying an insurance company upfront for expenses that may not occur for months or even years.

Need More Help Lowering Workers’ Compensation Costs?

American Insuring Group is committed to providing the best insurance coverage at the best price. First, we offer blogs for a variety of industries to help improve workplace safety, which will help lower WC costs.

Plus, we are independent agents who specialize in Workers’ Compensation Insurance. Give us a call today at (800) 947-1270 or (610) 775-3848 or connect with us online.

Tags: Workers Compensation Insurance, PA Workers Compensation Insurance, workers comp costs, Commercial Insurance, Return-To-Work Programs

4 Benefits of Workers’ Compensation Insurance for Employers

Posted by David Ross on Sun, Jan 12, 2020

save_property_insuranceAs an employer, you may look at Workers’ Compensation (WC) Insurance as a necessary evil, but the truth is Workers’ Compensation Insurance provides many benefits to employers as well as employees.

It is required by law for the majority of employers in Pennsylvania, and savvy employers understand the value of having Workers’ Compensation Insurance.

What is Workers’ Compensation Insurance?

The Pennsylvania Department of Labor and Industry defines Workers’ Compensation as “mandatory, employer-financed, no-fault insurance” that compensates employees who suffer a work-related injury for medical treatment and lost wages. The goals of WC are to 1) create safer workplaces, 2) promptly treat and compensate injured employees, and 3) reduce litigation costs.

In Pennsylvania, any employer with at least one employee who could be injured or develop a work-related disease is required to provide Workers’ Compensation for its employees, with very few exceptions such as federal workers, longshoremen, railroad workers, domestic workers, and some agricultural workers.

Here are 4 Benefits of Workers’ Compensation Insurance for Employers:

Regulatory Compliance

If an employee suffers a compensable work-related injury and the employer does not have Workers’ Compensation Insurance, the employer will be required to reimburse the state for not only direct costs of the injury, but also interest, penalties, attorney fees, and fees under the Workers’ Compensation Act.

An uninsured employer can also face the risk of civil litigation by the injured employee and the risk of criminal charges by the state.

Financial Benefits

By complying with the commonwealth’s Workers’ Compensation Insurance requirements, a business avoids the reimbursement costs stated above. Workers’ Compensation Insurance also protects employers from direct lawsuits by injured employees, eliminating the risk of costly legal fees and potential settlement.

Prevent Lawsuits

The Pennsylvania Workers’ Compensation Act does not allow employees to bring lawsuits against employers for work-place injuries if the employer provides Workers’ Compensation benefits.

Any form of litigation can have negative effects on a business. It can drain your company’s finances, time, energy, and resources. Litigation can also affect your relationship with your employees, customers, vendors, investors, etc.  A lawsuit can tarnish your company’s reputation and has been known to lower a company’s value and sales, and even force companies out of business.

Protection for a Vital Asset – Employees

Workplace injuries have far-reaching effects on employers’ costs, including lost productivity, retraining costs, and more. A safer work environment and fewer injuries are better for everyone – employer and employee alike.

Workplace injuries can cause negative physical and psychological effects on employees – both in and out of the workplace.  A serious injury can change an employee’s life forever, creating chronic pain, limited abilities, depression, and anxiety. One study found that anxiety affected more than 50% of injured workers and more than 25% experienced depression.

Fewer injuries mean lower Workers’ Compensation costs. That saving has become a great incentive for smart employers to create safer workplaces for their employees. To save on WC costs, many employers have developed safety programs and provide safety training.

Another Workers’ Compensation cost-saving measure employers often implement is a return-to-work (RTW) program. The goal of such a program is to get an injured employee back to work as quickly as possible, even if that means working part-time or having lighter duties. An RTW program benefits employees by improving morale, helping them retain social connections and skills, and providing financial security.

How to Save on Workers’ Compensation

Since Workers’ Compensation is required by law for most employers in Pennsylvania, you might as well embrace these benefits. However, that doesn’t mean you should pay more than necessary.

Give the experienced independent agents at American Insuring Group a call at (800) 947-1270 or (610) 775-3848 or connect with us online. We’ll help you save on Workers’ Compensation costs by carefully comparing policies from multiple providers to ensure you get the right policy at the best price!

Tags: Workers Compensation Insurance, workers comp costs, Return-To-Work Programs

5 Ways to Lower Your Workers Compensation Costs

Posted by David Ross on Sun, Nov 10, 2019

AIG business man pushing cost buttonWorkers' 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.

 

Tags: Workers Compensation Insurance, workers comp costs, Return-To-Work Programs, WC Insurance, Safety Programs

4 Steps to a Speedy Workers’ Comp Insurance Claim

Posted by David Ross on Sun, Oct 13, 2019

workplace_safety_lower_insurance_300Despite all of your best efforts to create a safe work environment, accidents do happen on worksites – whether it’s a restaurant or a construction site or even an office, and you should be prepared.

Knowing what to do when someone injures themselves in the workplace can help ensure that the injured employee gets immediate medical attention and that any Workers’ Comp insurance claims are processed quickly and accurately. You should have a process in place, and all managers and supervisors should be trained in that process.

Here Are Four Steps That Should Be Included in the Process:

Take Care of the Injured Employee

Your employee’s welfare should be your first priority. As soon as an injury occurs, determine the appropriate medical treatment. If it’s a serious injury, call 911 immediately. If it isn’t a serious injury, take the injured employee to a medical care facility.

Some insurance carriers offer a 24/7 injured employee hotline that has registered nurses who can provide medical guidance. If your Workers’ Comp insurance carrier has a hotline, all managers and supervisors should be aware of that number.

Survey the Scene of the Accident

Once the injured employee has received appropriate medical care, survey the scene. If it’s a severe injury, any equipment involved in the incident should be secured, and the area where the incident occurred should be cordoned off with cones or tape until the local police and/or the Occupational Safety and Health Administration (OSHA) are finished with their formal investigation.

Even with minor injuries, surveying the scene could reveal what caused the injury. For example, if an employee falls because of a wet floor, that area can be cleaned up to avoid further accidents.

The purpose of an investigation isn’t to lay blame but to determine the root cause of the accident, so it doesn’t happen again. In that same example, if a faulty refrigerator caused that wet floor, the appliance can be fixed to avoid any additional injuries.

Collect Information

A manager or supervisor should then gather details about the incident. Write down the details of the accident – where it happened, how it happened, etc. – and any medical treatment the injured employee received. Also, talk to anyone who witnessed the incident and document what they share and their contact information. 

Complete the Incident Report

Before the details of the injury fade from memory, the incident report should be completed. OSHA requires employers to maintain records of all work-related injuries using its Injury & Illness Record-keeping Forms and to notify OSHA if the injured employee needs to be hospitalized.

Any Workers’ Compensation claims should be filed within 24 hours of the incident. 

If the injury is fairly minor but still prohibits the injured employee from performing his or her regular tasks, you may also need to consider if a transitional or modified job may be appropriate. The longer an employee is out of work, the harder it is to go back and the more it costs you. A return-to-work program can help keep injured employees off of long-term disability and save you money.

You may also want to take a look at your safety program. Did an employee not receive proper training? Was a safety procedure ignored? What can you do to help ensure this type of accident doesn’t happen again?

Want to Save on All Kinds of Commercial Insurance?

The agents at American Insuring Group specialize in commercial insurance, including Workers’ Compensation. We can help ensure that you have the right coverage and – as independent agents who can compare costs with several companies – that you get it at the best price!  Give us a call at (800) 947-1270 or (610) 775-3848 or connect with us online.

Tags: Workers Compensation Insurance, workers comp, workers comp insurance, workers comp costs, Return-To-Work Programs