Employer Strategies for Optimizing Workers’ Comp Claims Outcomes

In 2020 and 2021, the average cost of a workers' compensation insurance claim was $41,757. This number highlights the costs involved and, of course, the value of having workers' comp insurance for a business.

The higher the claim, however, the higher the chance your workers’ comp insurance premiums will increase. While there are a few administrative ways you can control the cost of workers' compensation insurance, the best way to keep costs down is to reduce the number and cost of employee claims. On top of that, money isn’t the only thing. A good workers' comp stakeholder also cares about their employees, helping them get back to work quickly and safely.

So, what can you do to optimize the outcome when you or your employee does need to make a workers’ comp claim? There are a variety of effective strategies, which involve a holistic approach that includes education, planning, and claims management.

Here are some things to consider:

Proactive Safety Measures Will Reduce Workers’ Comp Insurance Claims

Applying safety best practices is the first and best thing you can do to reduce the number of workers’ comp claims. This means investing in training for all employees and supervisors and in appropriate PPE. Make sure that PPE fits everyone who needs it. Perform regular safety audits to ensure that people are following the rules. Even office workers benefit from ergonomic assessments to help them reduce the risk of repetitive strain injuries such as carpal tunnel.

A Quick Response Can Minimize Injuries

Train all employees in basic first aid, including CPR. This allows a quick response to an accident or injury and also makes sure that workers know when to call for medical attention. Also, train employees to thoroughly document the incident.

Avoid punitive and "shaming" techniques to reduce accidents. For example, X days since the last accident signs have been shown to discourage reporting rather than encourage good safety practices. Make sure that everyone knows all incidents must be reported, even if nobody seeks medical attention. This allows you to understand the cause of the incident and prevent it from happening again.

Efficient Workers’ Comp Claims Processing

Your HR team needs to put in claims right away. Delays in claims are expensive and can result in claims being denied. Make sure nobody waits until the deadline to file the claim. Inform workers that they need to promptly inform their employers so the claim can be put in in time.

Develop systems to ensure accurate processing and reporting so as to reduce the risk of claim denials. A denial could result in your employee being forced to sue you to get the money they need to survive, impacting not only your costs but overall morale.

Return-to-Work Programs

One of the most effective ways to reduce the cost of a workers' comp claim is a well-designed return-to-work program. Return-to-work programs allow employees to return part-time or in other capacities before they have fully recovered. They should not be used to force people back to work before they have clearance from their doctor, as this can and will slow their recovery and actually increase costs.

For somebody who is sidelined, working in another capacity increases engagement and improves their mental health. Return-to-work programs also reduce the risk that the injured employee will quit.

Monitor and Proactively Manage Claims

A lot of HR teams make the claim and then just sit back until it's denied or approved. This can easily result in the claim sitting there until the deadline, or even longer, and not being paid. Your employee struggles to survive and you have to help them out.

Unfortunately, proactively managing claims takes a lot of time. This is where Alloy comes in. We handle claims management and pay through our own claims fund so your employee gets their medical bills and lost income covered faster.

Encourage a Culture of Safety In Your Workplace

Getting people to wear their PPE, report injuries, and follow safety practices is just the beginning. The best employers encourage a culture of safety. This produces a workplace that is not only safe but healthy and positive.

Safety culture includes reducing toxic behavior such as bullying, name-calling, "hazing", etc, developing a team-based culture where everyone watches each other's backs, and helping employees set their egos aside in the name of safety. Not only does safety culture reduce accidents, but it increases morale and productivity. A healthy workplace is also one where people are happy to come to work and less stressed.

Another aspect is robust communication. Communication should be clear, frequent, and positive. While you sometimes have to talk about what employees are doing wrong, try to keep it from being the focus. Instead, talk about what they can do to support a safe and healthy culture.

Legal Compliance In The Workers’ Comp Claims Process

Make sure your human resources department stays up to date on the legal requirements for workers' compensation in your jurisdiction. Noncompliance can result in fines, and higher insurance premiums and may also mean you don't have enough coverage. As mentioned, a denied claim can also lead to an employee lawsuit.

Use Data and Analytics To Scrutinize Workplace Injuries

Don't just file away accident reports. Analyze them. Accident reports can show you where your business needs to improve, whether it is training, new equipment, or even signage. For example, if accidents tend to happen at a certain time of day, is the cause of fatigue? Boredom? Analytics should be supported by proactively talking to your employees to get their subjective impression of what happened.

Employee Assistance Programs (EAP)

Stress is a major workplace safety issue. It contributes to injuries in a number of ways, including Increased violence, distracted behavior, fatigue from insufficient sleep, rushing to meet deadlines and substance abuse risks.

An employee assistance program can help reduce employee stress by giving workers access to counseling, financial, advice, health advice, etc.

When an injury does happen, the EAP can speed the employee's recovery by supporting their physical and mental health. Providing mental health resources (and developing a culture where there is no stigma against accessing them) helps reduce injuries and increases the speed of recovery.

Take The Next Steps To Optimize Your Workers’ Compensation Program

Reducing the cost and frequency of workers' compensation claims not only keeps premiums down but is a key part of building a better environment for your employees. It reduces downtime, injuries, and turnover. The best way to do this is to prevent claims through proactive safety measures, data analysis for continuous improvement, and encouraging a safe and healthy work environment. A good return-to-work program helps reduce the cost of each claim.

Proactively managing claims that do happen also helps reduce costs. If you need help managing your workers' compensation insurance, contact Alloy today.