A Recipe for Avoiding Disaster

SBCA Magazine,

Here are the proven ingredients to manage workers’ compensation insurance costs.

My wife is a great cook who has amassed a giant notebook full of delicious recipes. One of the reasons her food is so good is because she follows these recipes closely. I’m particularly fond of her English toffee. It’s exquisite, however, this recipe requires attention to detail and diligence (execution of each step in the process). Similarly, this article will share a proven recipe to lower your workers’ compensation insurance costs (and improve productivity) that will yield sweet results if followed diligently.

This recipe contains ten ingredients, all of which should be analyzed and diligently added to your overall efforts.

Ingredient: Review Current Processes, Procedures, and Results

Directions: Successfully following a recipe starts with gathering all the needed ingredients and understanding the process by which they will be combined. You can do this in your facility by first asking and answering the following questions:• What safety programs and training do we have in place?

  • How often do we conduct plant safety inspections? Are they effective? How do we measure effectiveness?
  • What do our injury and illness reporting forms look like? Who is accountable for completing them?
  • How do you ensure claims are reported immediately and accurately?
  • How comprehensive is our transitional duty policy?
  • What is your process for obtaining employee medical restrictions from the treating physician and following them?

There are a lot of essential ingredients and they all take a lot of care and dedication to create, implement,
and evaluate in order to ensure the result is a success

Ingredient: Review Return-To-Work Policy

Directions: Look over your return-to-work (RTW) policy to ensure transitional duty is clearly outlined as:

  • Temporary, lasting no longer than 90 days.
  • Similar in the shift and hours worked with the employee’s current job.
  • Containing no overtime.
  • Compliant with the Americans with Disabilities Act.
  • Required as a condition of employment.

Ingredient: Commitment by Management

Directions: Management commitment is an essential ingredient. Management support and engagement, recognized by all employees, will allow your safety-focused initiatives to move forward and deliver positive results. The steps to gain management buy-in are: 

  • Determine what metric is important to management.
  • One useful metric is the workers’ compensation cost per full-time equivalent (FTE) employee.  For example: If your workers’ compensation costs for 100 FTEs is $200,000, then your cost per FTE is $2,000. Measure this metric each year to help monitor cost trending and even cost per division within your company.
  • Define the financial impact of a single claim, fully considering direct and indirect costs.

Ingredient: Train Supervisors

Directions: Supervisors must clearly understand how to respond to injuries, as this response sets the tone for the claim outcome. Essential ingredients in supervisor training should involve the following components:

  • Understanding the benefits, processes, and procedures involved in filing workers’ compensation insurance claims and being able to explain them to an injured worker.
  • Knowing the appropriate post-injury response.
  • Determining the most appropriate transitional duty to fit any physical restrictions.
  • Understanding how communication on a personal level with an injured worker is essential to positive outcomes.

If you hire people well-suited for the work they are asked to perform, chances of injury and even some illnesses are reduced significantly.

Ingredient: Hire the Right People

Directions: Obviously, if you hire people well-suited for the work they are asked to perform, chances of injury and even some illnesses are reduced significantly. In your hiring practices, make sure you:

  • Review your job descriptions, your employment application, and interview process.
  • Conduct thorough background checks.
  • Perform post-job medical, physical strength, and mobility evaluations.
  • Administer personality, cognitive, and/or integrity tests to gather baseline information on new hires.
  • Review initial training and onboarding procedures to ensure they are effective at preparing new hires to perform their assigned tasks. If they are assigned new and/or additional tasks after hire, review the process by which they are trained.

Ingredient: Responding to Injuries

Directions: Company and co-worker response in the initial moments after an injury occurs heavily determines the outcome of the claim. Having a consistent post-injury procedure dramatically improves results. To that end, ensure your company:

  • Is committed to providing timely incident reporting. Studies suggest the best outcomes occur when an injury is reported within 24 hours of the injury.
  • Is prepared to provide on-site injury triage. 
  • Provides a work environment where injured employees are encouraged to report the injury, and in return receive piece of mind, medical guidance on steps to self-treat the injury or assistance in seeking further medical attention.

Ingredient: Obtain Proper Medical Care

Directions: It should go without saying that sufficient and proper medical care to address a specific injury has a significant impact on any workers’ compensation insurance claim and the employees’ road to a full recovery. As such, ensure you:

  • Have access to highly qualified doctors and/or medical facilities in order to treat injured employees during all business hours for all business locations.
  • Have the ability to provide immediate transportation to the medical facility for an injured employee, in the event medical emergency transportation is either not available or cannot arrive in a timely manner.

When it comes to injuries and illness, it's very important to establish employee expectations regarding injury and illness reporting, claim filing, and returning to work.

Ingredient: Manage Claim Handling

Directions: In managing a claim, there are a few important steps to take:

  • Discuss claims handling options and expectations with your insurance broker, insurance claims adjuster, or third-party claims administrator.
  • Communicate with an injured employee weekly, at a minimum, to check on the injury, their health and well-being, and to express concern.
  • Obtain regular claim status reports throughout the claims process.

Ingredient: Consistent Claims Investigations

Directions: Post-injury investigations are also an important ingredient that impact workers’ compensation insurance costs. To be effective, these investigations should include:

  • Injured workers’ essential information, which must include name, date of birth, Social Security number, and wage should be completely documented.
  • Thorough details concerning the injury, not simply “injury to shoulder”.  Include the what, where, why, and how regarding every aspect of an injury. Also include a thorough description of the work environment at the time of the injury.
  • A review of any prior injuries, accidents, and/or relevant medical records that might provide context to the severity and impact of the current injury.

Supervisors must clearly understand how to respond to injuries, as this response sets the tone for the claim

Ingredient: Communication

Directions: When it comes to injuries and illness, it’s very important to establish employee expectations regarding injury and illness reporting, claim filing, and returning to work. Your employee handbook should include the following:

  • A thorough description of what workers’ compensation insurance is and what it covers.
  • How to report injuries and illnesses to supervisors and, if necessary, obtain medical treatment.
  • How employees will be paid if they miss work due to an injury or illness.
  • A thorough explanation of the company’s RTW policy. 
  • A clear statement that the company wants to support each employee throughout their full recovery and the desire that they can come back to their job at the company.

Bottom Line

That’s the recipe for controlling your workers’ compensation insurance costs. There are a lot of essential ingredients, and they all take a lot of care and dedication to create, implement, and evaluate in order to ensure the result is a success. If you would like further guidance on any of these steps, or if you simply have questions, please feel free to contact me at rlangton@bowermaster.com. 

About the Author: Rich Langton at Bowermaster & Associates is an SBCA endorsed insurance broker who has worked with the component manufacturing industry for 21 years.