The Top 7 Ways to Control Workers' Comp Costs
Businesses with regular exposure to worksite injury face a daunting set of challenges: How to keep employees focused on safety and manage claims when they come in. Naturally, you want to be a company that takes care of your team, preventing injuries and providing all the necessary support for injuries when they occur. But you also don't want to drain your resources by paying workers' compensation premiums for coverage that is absolutely necessary to run your business. A scary stat is U.S. Businesses pay an average of $1 billion per week on non-fatal workplace injuries. You need to be able to support your team while controlling workers’ comp costs.
Tips to Help Control Workers’ Comp Costs
You need to find the right tools to help you manage your workforce, keep employees focused on safety 24/7, and manage claims. Finding ways to impact workers’ comp costs is essential if you don’t want to see costs spiral out of control.
At Alloy Employer Services, we understand that the workers' compensation system - which should be on the side of employers and their teams - doesn't always work as it should. We're here to offer some critical ways that your company can control workers' compensation costs to create a safer, saner work environment that your employees can rely on.
Let's find the right solution for you today
Strong plan design and skillful risk management are the missing ingredients that cost businesses the most money and often they are not even aware of it.
Get a Free Quote
1. Implementing Safety Measures
The first and best way to control workers' comp costs is to prevent injuries with safety measures. You already knew this, but there's never too much focus on safety, especially in hazardous industries like construction, healthcare, or logistics. Companies can reduce the likelihood of workplace injuries by constantly looking for ways to create a safer working environment.
This includes providing comprehensive training, safety equipment, well-maintained machinery, and implementing safety protocols for employees. You also don't have to guess or do it alone. Seek out the help of safety professionals with experience in your industry to hone your safety measures across the board. Highlighting the tangible benefits of implementing safety measures, a recent survey of CFOs revealed that each $1 invested in injury prevention returns $2 or more.
2. Conducting Regular Safety Audits
Safety is never a "set it and forget it" matter. Regular safety audits can help you identify potential hazards and help companies implement changes that reduce workplace injuries. Work together. Nominate safety officers and reward them for identifying potential risks. Make sure no office extension cord or rough patch of floor goes unnoticed.
Constantly run your working environment against high safety standards. Safety audits are even more critical if you have varying work environments, like construction sites or roadwork, where safety must be fully implemented again and again.
3. Prompt Injury Reporting
Require your employees to report injuries and illnesses right away. Have the injury reporting forms tucked into the first-aid box and available at every site. This measure helps to ensure that an injured employee receives immediate and proper medical care. In many cases, immediate care can reduce the overall severity of an injury. Getting ice on a burn or wrapping a sprain can prevent it from worsening after the injury occurs.
Workers' comp claims that are initially ignored can take on a life of their own and lead to unnecessary costs, but immediate reporting and care can reduce harm, reduce total settlement amounts, and let your team know that their safety is your top priority. The National Council on Compensation Insurance found that a 2-week delay in injury reporting results in an 18% increase in worker compensation costs. The longer you delay, the more the overall expenses increase. Timely claim reporting lowers work comp claims costs and improves your bottom line.
4. Return-to-Work Program
A return-to-work program focuses on getting injured employees back on the schedule with light work and rehabilitation. This can help injured employees return to work quickly, which reduces the cost of workers' compensation claims (lost wages) and helps to keep productivity high among your teams. It can also help injured workers recover more quickly with their team's support and have the income to spend on bills and recovery compared to waiting for a workers' compensation settlement.
5. Fraud Prevention
Fraudulent workers’ compensation claims are far more common and costly than most companies realize. It is estimated that this costs companies somewhere in the neighborhood of $30 billion per year. Companies should also be vigilant to prevent workers' compensation fraud. Your workers' comp policy funds should be dedicated to those who genuinely need it. Defending your policy against false claims, exaggerated injuries, and fraudulent medical bills protects your team members, who will have a more challenging time getting approved settlements if fraud slips through.
Ensure that each employee's injury circumstances and medical reports match the claim and that their medical bills are legitimate so that you can support those whose recovery is worthy of the funds that would otherwise be stolen through fraud.
Learn more about the Top Scams That Result in Workers’ Comp Fraud!
6. Reviewing Claims
To this end, companies should review claims carefully to ensure they are accurate and appropriate. This includes reviewing medical bills and ensuring employees receive the proper medical care for their injuries. Ensure employees get the care they need to recover as fully and quickly as possible to reduce the amount of settlement they will require. At the same time, verify that their claims are genuinely within your policy's coverage limits so that correct claims will be approved and you can control workers' compensation costs by sorting out incorrect claims.
7. Have an Expert Manage Your Claims
Lastly, a risk management expert can ensure that claims are managed proactively to avoid typical mistakes that lead to poor outcomes. An expert can help direct injured employees to the best resources to help them recover quickly and require the least amount of purely monetary support. Your compensation consultant can monitor appointments, ask for independent medical exams (IMEs) when needed, and help identify fraudulent claims if or when they become an issue.
Taking Control of Your Workers' Compensation Costs
As an employer in a high-risk industry, you want to take good care of your team members when they get injured, but you also don't want to lose control of the cost of your workers' compensation policy. The best way to do that is through proactive safety and claims management. Optimize your workers' recovery arc, get them back on the job, and prevent fraudulent claims from damaging the system.
Alloy Can Help
Do you have questions about improving the outcomes of your claim and controlling workers’ comp costs? Alloy Employer Services has years of experience helping employers to manage claims and control costs. Alloy can help your company with a wide range of services, from reviewing your current rates and mod to managing many of the time-consuming tasks your HR team faces daily.
Free Claims Assessment
Contact us for an absolutely free, zero-commitment analysis of your company's workers' compensation program, including rates and claims management performance. Get it now!
