5 Steps to Drive Down Workers’ Compensation Claims and Costs

Workers’ compensation is one of the most costly expenses for businesses. In 2015, workers’ compensation cost employers $1.32 for every $100 of payroll. Employers spent more than $95 billion annually on workers’ compensation insurance, according to 2010 data.

Luckily, businesses aren’t entirely at the mercy of the rising cost of workers’ compensation. Workplaces can utilize five steps to drive down workers’ compensation claims and costs, reduce expenses, and protect employees’ health.

1. Pre-Screen Applicants

Though it may be cliche, the old adage holds true: the best defense is a good offense. Workers’ compensation costs can be controlled and minimized by implementing pre-screening procedures during the hiring process.

Before hiring a new employee, you should:

• Thoroughly define the position and its requirements
• Conduct background and reference checks
• Ask applicants to undergo drug testing and a physical (if relevant)
• Vet the applicant through a phone interview

This process will ensure applicants are serious about the position and are of sound mental and physical health. An employee physically unable to perform the duties of a labor-intensive job, for instance, would be a liability to your business.

Pre-screening applicants also limits the potential for fraud. Unscrupulous applicants could be hired with the sole intent of filing a bogus claim, costing your business time and money.

2. Communicate With Employees

It may seem like non-advice, but listening to your employees is often overlooked. Employees can call attention to unsafe working conditions, broken equipment, and other factors that contribute to workers’ comp claims. Such communication can lead to you neutralizing dangers and threats before anyone is injured or made sick.

Employees can key you in on equipment that is in need of service or repair. Malfunctioning and ill-maintained equipment poses a safety hazard to your employees — and increases the likelihood of a workers’ compensation claim being filed.

Staying in touch with out-of-work employees reduces the likelihood of a lawsuit, too. It will also aid the employee in getting back to work, even in a reduced capacity.

3. Train Your Employees to Be Safe

Workplace injuries are most frequently caused by:

• Improper material handling
• Slips and falls
• Being struck by an object
• Accidents involving tools
• Overuse and strain

Many of these injuries can be prevented by training your employees to focus on safety first. Ensure their training entails how to properly use tools and which tools are best for the job when to don protective materials, and that productivity is never prioritized over safety.

Training employees to properly lift objects is one such example of safe and effective training. Promoting safe driving methods can prevent on-the-job crashes and injuries, sparing your business from costs averaging $74,000 per incident.

4. Implement a Wellness Program

Wellness programs inspire employees to take action to live healthier lives. Employees are incentivized to lose weight, quit smoking, and reduce stress. Encouraging screenings and doctor visits can shine a light on future health issues long before they begin to impact your employees.

Your business reaps the rewards of implementing a wellness program, too. Healthier employees will lead to reduced healthcare premiums and disability costs — and, yes, fewer workers’ compensation claims. Wellness programs are win-win for all.

5. Reduce Medical Costs

Prescription drugs are costly and some can even lead to addiction and complicated health issues. While no one can argue against the necessity of medications to treat injuries and illness, the most effective treatment includes some form of behavioral therapy and pain management.

Meeting with therapists and other such specialists shortly after an injury can help employees recover faster. This, in turn, means they’re less dependent on medication or costly procedures. The combined approach of medicine and behavioral pain management will contribute to employees returning to work sooner (even in a limited capacity), reducing the length of their workers’ compensation claim.

Develop a Forward-Thinking Strategy

Being proactive is the best strategy to drive down workers’ compensation claims and costs. Many claims can be avoided by working to eliminate the causes of workplace injuries and illnesses.

Vetting applicants prior to hiring them will reduce the likelihood of fraud or people unfit for the duties they would be expected to perform. Communicating with employees will bring attention to unsafe conditions and practices that could lead to lengthy and costly claims. A wellness program and pain management, combined with medically-necessary prescriptions and procedures, will leave your employees healthier and in better shape.

Gallo|Thomas advisors can work with you to review your workers’ compensation coverage. We’ll assist you in developing and implementing a proactive strategy that protects both your business and your valuable employees.